Many government programs offer financial assistance to parents of premature babies beginning life in a Neonatal Intensive Care Unit (NICU).
However, most of these benefits do not come with evident labels. Instead, you must attack the problem from different angles to get the desperately needed help.
For instance, looking for programs that might help NICU parents unearth one set of resources that indirectly lowers a broad range of expenses while possibly providing wage replacement support.
Meanwhile, searching for resources specific to newborns reveals a second benefit set that directly reduces costs while possibly supplementing the family income.
Financial Assistance for NICU Parents
Various government programs provide financial assistance to NICU parents struggling with the extra expenses and lost income connected with premature delivery.
No federal agency provides grants directly to individuals, but NICU parents frequently stop working to care for their premature infants for extended periods. Often, the lost wages make them eligible for various government programs that provide financial assistance to low-income families.
Free grant money for bills and personal use base eligibility on projected income, not what you earned before your newborn was delivered preterm. You might find help with home repairs, HVAC upgrades, appliance replacement, utility bills, phone expenses, and more.
Federal and state governments sometimes provide NICU parents with financial assistance after their preterm babies’ birth while on work leave. The help might result in wage replacement, job protections, and critical health insurance continuation.
Maternity leave laws in the United States are notoriously uneven.
- The federal FMLA applies nationwide to eligible employees working for covered employers – or only about half of all workers.
- Several states have adopted paid family leave regulations, including California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island, and Washington, with more on the way.
Both state and federal governments provide financial assistance to NICU parents via the tax code. Your unreimbursed medical expenses are tax-deductible. Take advantage of every eligible expense, and choose between three vehicles to maximize your savings.
The tax code provides surprising levels of financial assistance to parents of premature babies when they deduct all eligible expenses – not just the most obvious.
IRS Publication 502 provides a detailed list of qualifying expenses. Track them all, and consult your tax advisor.
For instance, most parents will think to include unreimbursed NICU expenses (after insurance pays), such as deductibles, copayments, coinsurance, and out-of-network balance bills.
However, it is easy to overlook the more obscure travel-related expenses such as gas, tolls, lodging, and meals that parents incur while tending to their incubator-confined newborn.
The IRS provides three options that offer varying levels of financial assistance based on the specific circumstances of each parent of premature babies. Choose carefully, as you can only apply the tax deductions once.
- Flexible Spending Account (FSA) allows interest-free medical loans for bad credit. Your employer must immediately reimburse all qualifying expenses, giving you up to 52 weeks to repay the money while avoiding FICA and income taxes.
- Health Savings Account (HSA) permits you to use pre-tax dollars to reimburse yourself for qualifying medical expenses years into the future, provided you continue with a High Deductible Healthcare Plan (HDHP) – overcoming the annual contribution limits.
- Schedule A Medical and Dental Expenses filed with Form 1040 offer savings to couples meeting two critical thresholds.
- Itemized deductions exceed the standard deduction
- Medical expenses surpass 7.5% of Adjusted Gross Income
The Centers for Medicare and Medicaid Services provides critical but hidden monetary help for NICU parents through its oversight of the No Surprises Act, which bans out-of-network balance bills for emergency services.
NICUs are crawling with highly trained Neonatologists, Neurologists, Pulmonologists, Cardiologists, and other specialists. Many providers might not participate in-network with your insurance – even if your hospital does.
The No Surprises Act protects your finances from exorbitant out-of-network balance billing from NICU specialists treating your preterm infant.
- Ban surprise bills for most emergency services, even if you get them out-of-network and without approval beforehand (prior authorization).
- Ban out-of-network charges and balance bills for additional services (like anesthesiology or radiology) furnished by out-of-network providers as part of a patient’s visit to an in-network facility.
The government provides financial assistance once NICU parents are ready to take their preemie to daycare so they can return to the workforce. You might find help from various programs that lower costs.
Childcare.gov summarizes the many initiatives succinctly.
- Federal Government Programs
- Vouchers that subsidize expenses
- Early head start programs to prepare children for school
- State-funded prekindergarten programs
- Military childcare close to service member stations
- Local Provider Discounts
- Local support and scholarships
- Sibling discounts
- Military discounts
- Work and School-Related Programs
- Dependent Care Flexible Spending Account
- Employer-sponsored childcare
- On-campus college childcare
- Child and dependent care tax credit
Government Assistance for Premature Babies
Parents of premature babies can often find government-sponsored financial assistance through many programs targeting infants directly. In specific cases, delivering twins or triplets enhances eligibility.
SSI for Premature Babies
Supplemental Security Income (SSI) for premature babies is the most direct form of government-sponsored financial help. You might receive a sizable monthly check for one to three years or more.
Start by completing an SSI application online at SSA.gov
The maximum SSI might pay for a premature baby is $914 per month. However, your infant must meet health criteria, and the deemed income from parents might diminish the benefit to zero.
Your infant must meet the childhood disability definition
- Low-birth weight
- Failure to Thrive
Countable income that might reduce the SSI benefit
The answer to “how long can a premature baby receive SSI benefits” is – it depends. Benefits might continue for one, two, or eighteen years assuming the deeming of parental income and resources do not preclude payments.
- Lasts to the first birthday: Low Birth Weight
- Continues to the third birthday: Failure to Thrive
- Lasts until age 18: meets other childhood disability definitions
Low-Birth Weight Medicaid
Low-birth weight is not a qualifying criterion for government-sponsored Medicaid or the Children’s Health Insurance Program (CHIP). States base eligibility on the family percentage of the Federal Poverty Level (FPL), which favors many premature babies in a way you might not expect.
Apply for Medicaid at the Healthcare.gov website. You might qualify if living below the FPL standards set by your state, which include two elements:
- Modified Adjusted Gross Income (MAGI)
- Persons in the Household
Twins and triplets are more likely to deliver preterm with low birth weight. They also increase household size substantially, boosting the chances your family might qualify for Medicaid or CHIP!
2023 Federal Poverty Level
|Persons in Household||MAGI Limit|
|More||Add $4,720 for each additional person.|
Women Infants Children
The US Department of Agriculture (USDA) administers the Women, Infants, and Children (WIC) program that might provide financial assistance with formula to feed your premature baby.
Check if you might be eligible for WIC using the USDA prescreening tool.
As with Medicaid, the low birth weight of your baby is not a qualifying criterion for WIC. Instead, where your family falls relative to the FPL matters like other programs that help low-income families.
- Temporary Assistance for Needy Families (TANF)
- Supplemental Nutrition Assistance Program (SNAP or Food Stamps)
- Section 8 Housing Vouchers
Adding Newborn to Insurance
The US Department of Labor provides critical but hidden financial assistance for premature babies by enforcing The Newborns’ and Mothers’ Health Protection Act of 1996 (NMHPA).
Enroll your infant in your health insurance plan within 30 days of birth!
The NMHPA stipulates, “As long as you enroll your newborn within 30 days of birth, coverage should be effective as of your baby’s birth date, and your baby cannot be subject to a preexisting condition exclusion.”
NICU bills are astronomical without insurance, so do not delay.