3 Surprise Costs of Having a Baby (and How to Prepare Employees)

It’s no coincidence that one of the most special times in a person’s life also happens to be among the most expensive.

Having a baby in a hospital setting costs a family an average of $3,035 — and that’s just for a delivery that’s “natural” in nearly every sense of the word (read: no epidural). The dollar signs tick up from there, amounting to medical bills that can keep coming long after mom returns from maternity leave.

But chances are none of this is a shock to you or your employees. The thing about babies, at least biological ones, is that nature gives most new parents roughly nine months to prepare. And many new moms or dads know to expect medical expenses ahead of time.

Still, there are some costs that even the most astute planners may not anticipate. Life can throw wrenches in every part of a person’s birth plan, and your employees may get hit for more than they bargained for when welcoming that new bundle of joy — which can seriously affect their engagement and productivity.

To prevent those surprises, educate your workforce about their maternity coverage and encourage them to plan ahead for these three unexpected costs.

1. Out-of-Network Specialists

About 1 in 2 women gets an epidural for their delivery, and 1 in 3 will get a cesarean section. Both options typically require an anesthesiologist. But even if the hospital is within the patient’s insurance network, the anesthesiologist may not be, resulting in an out-of-network charge as high as $15,000 — or more.

How to prepare: Employees should call the hospital or birthing center ahead of time and ask for an estimated breakdown of costs. As part of that conversation, make sure to ask whether any providers, such as anesthesiologists or their potential backups, fall out of network with their insurance plan. Also consider other providers who may need to be involved, such as pediatric specialists. Even if they’re not considering an epidural, note that they should ask anyway, just in case — plans for a drug-free delivery might change with every contraction.

If those estimates exceed your employees’ comfort level with paying them, there’s nothing wrong with switching hospitals in the middle of the pregnancy. In fact, one study showed that 13 percent of women switched hospitals for their second delivery after getting a surprise bill from the first one. Among them, more than half didn’t get an unexpected bill the second time around.

2. Medical Emergencies

Hopefully, everything goes as planned — but sometimes it doesn’t. Medical emergencies may call for extra reinforcements, from emergency procedures to unexpected stays in the neonatal intensive care unit. For example, an average cesarean adds another $3,300 on top of the existing costs of having a baby, and that estimate can go up with complications. Even if a pregnant woman opts for a home birth or birthing center, things may go wrong and require urgent transport to the hospital. That trip can make the experience a whole lot more expensive.

How to prepare: There’s no true way to safeguard against all the potential complications of childbirth, but getting routine prenatal care can help in a big way. As an employer, you can assist by allowing flexible schedules or work-from-home opportunities so that employees can attend those visits, as well as accommodating lifting and chemical exposure restrictions for pregnant employees.

3. Mental Health Issues

It’s not something anyone wants to have to plan for, emotionally or financially, but postpartum depression is more common than you might think. All told, roughly 1 in 7 women has symptoms of postpartum depression, defined as extreme and lasting feelings of sadness, fatigue or worry that begin between one to four weeks postpartum. And it’s not just for biological mothers: Dads and adoptive parents can suffer, too.

The costs of getting care for those issues range by the treatment. Some people may need psychotherapy, medications or both, which can add up to steep weekly and monthly mental health expenses.

How to prepare: As soon as an employee begins noticing symptoms of postpartum depression, they should start searching for an in-network mental health provider. You can help them by removing the stigma and discussing how employees can take advantage of mental health benefits and other resources, such as mental health telemedicine. A generous parental or maternity leave can’t hurt either.

Planning for the Unplanned

Although there’s no surefire way to be ready for every possible scenario, an extra layer of financial planning can help prepare employees for surprise costs.
Depending on the circumstances, these tips may come in handy.

• New parents should add their child to their insurance plan as soon as possible, typically within 30 days of the baby’s birth.
• Some hospitals may offer a payment plan if patients request it. Encourage your employees to inquire, even if it’s a long shot. It never hurts to ask!
• Establish a flexible spending account option so that employees can pay for unexpected costs with pretax cash. They’ll also be able to contribute to it and build their funds throughout the entire pregnancy.

Bottom line? The more employees can save, the better. If they end up not using those savings toward medical expenses, they’ll have a little extra cash for diapers, clothes and other baby care essentials. This is a time of growth, quite literally, for your employees’ families — why shouldn’t that extend to their financial security as well? Check the chip guidelines carefully before exploring the CHIP programs, this will help you to find best plans for your child.