Coverage of a newborn may be regulated by a combination of state, federal and carrier level regulations and rules. Generally, in most states the state insurance law requires group health insurance policies (including HMOs) that provide maternity benefits to cover newborn children automatically for 30 or 31 days from birth.
For instance under Texas Insurance Code Sec. 1501.607 Coverage for Newborn Children:
(a) A large employer health benefit plan may not limit or exclude initial coverage of a newborn child of a covered employee.
(b) Coverage of a newborn child of a covered employee under this section ends on the 32nd day after the date of the child’s birth unless:
(1) children are eligible for coverage under the large employer health benefit plan; and
(2) not later than the 31st day after the date of birth, the large employer health benefit plan issuer receives:
(A) notice of the birth; and
(B) any required additional premium.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1, 2005.
(The same is true for a small employer, see Sec. 1501.157 Coverage for Newborn Children)
When a group policy includes automatic newborn coverage in their plan design, if the parent is enrolled for his or her own coverage at the time of the birth, the newborn is automatically covered for the first month. (If both parents have group coverage that includes automatic newborn coverage, the two plans coordinate benefits for the baby based on the birthday rule; i.e., the plan of the parent whose month and day of birth comes earlier in the year covers the baby first, then the other parent’s plan pays remaining expenses, if any, as secondary coverage.)
To continue the child’s coverage beyond the first 30 or 31 days, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) special enrollment rules requires that the “plan must allow an individual a period of at least 30 days after the date of the” birth to enroll the child and coverage “must begin on the date of birth.”
When in doubt on how the rules work or apply specifically to a fully-insured plan, confirming with a carrier is the best place to start. If self-insured, checking one’s plan documents in the eligibility section under “dependent insurance”, in my experience are where the rules for newborn coverage are located.