A college diploma is one of life’s most important assets.
So, too, is creating a safety net to handle the contingencies life may throw at you now that you’re out of school.
For graduating college students, one of the smartest ways to protect yourself is to minimize one of the biggest liabilities out there – medical expenses that can set you back for years.
Today, having health insurance is also important for another reason: To make sure you’re not fined for breaking the law. As of January 1, 2014, the federal Affordable Care Act requires most individuals to maintain minimum essential coverage for themselves.
To help graduates, as well as current college students, Marsh & McLennan Agency (MMA) has a comprehensive healthcare insurance program. Here’s a brief overview of the kinds of plans available to help you make an intelligent choice.
Student Health Insurance Plans (SHIP)
MMA partners with select universities and colleges to support their SHIP program. If your university offers SHIP, we can help you determine if this is the best option for you. A SHIP allows enrollment for one additional semester after graduation. Many of these plans require that your student health center serve as the primary care physician and coordinate all referrals. So if you live out of the area, continuing SHIP coverage may not be a good option. There may be higher out-of-network expenses and/or visits may not be covered.
These kinds of policies are available through state and federal Health Insurance Exchanges. You may qualify for premium assistance or a subsidy, depending on your family status and income. For example, if you are being claimed as a dependent on your parent’s tax return, you would likely not qualify for a subsidy.
There are significantly more choices available on a Health Insurance Exchange, and the policies may be less expensive than your parent’s plan or a SHIP plan, even without a subsidy. Also, having access to school coverage does not disqualify you from receiving a subsidy on a Health Insurance Exchange.
Minimum Coverage / Catastrophic Plans
A catastrophic health insurance plan covers essential health benefits, but has a very high deductible. This means it provides safety net coverage in case you have an accident or serious illness.
Catastrophic plans usually do not provide coverage for services like prescription drugs or vaccinations. The cost of a catastrophic plan may be lower than traditional health insurance plans, but deductibles are usually much higher. This means you may have to pay thousands of dollars out-of-pocket before full coverage from the plan kicks in.
Catastrophic plans are available on a Health Insurance Exchange for people up to age 30. The limited benefits typically cover three doctor visits at no charge and free preventive benefits with all other services.
Coverage on parent’s plan
Coverage from a parent’s plan could continue until age 26, if coverage is available for dependents. This may be more expensive than an individual policy, even without a subsidy. Depending on the coverage type, this may not be appropriate if you are not living in the same vicinity as your parents. The HMO coverage areas may not be broad enough.
This type of coverage is available to fill the gap between loss of student coverage, if you are aging off your parent’s coverage, or if new coverage through an employer is on the horizon. These plans offer limited benefits, and are relatively low cost. Short-term coverage may not meet the minimum essential health benefits requirement therefore it doesn’t satisfy the Individual Insurance Mandate. Penalties will apply if coverage gap is longer than three months.
Special enrollment periods for recent graduates
Graduating students have 60 calendar days from the date of any of the following triggering events to enroll in an individual plan on or off of the Health Insurance Exchange:
- Gaining or becoming a dependent through marriage or birth
- Change of family or income status resulting in being newly eligible for a subsidy
- Making a permanent move into a new service area
- Loss of current coverage including loss of student health coverage or loss of dependent status
How We Can Help
Marsh & McLennan Agency has been providing student health insurance for many years. Our Student Insurance Advocates can help you make sense of the options available to you. Our team of licensed and trained professionals is dedicated to supporting recent graduates, as well as those currently in college.