Now that college campuses are buzzing with students adjusting to life away from home, insurance coverage becomes increasingly relevant for student health. Insurance gets complicated when students are far from home. Even students who have coverage through a parent’s plan may risk higher out-of-network costs.
Furthermore, health insurance is not optional. Students are required to carry health insurance or face an IRS penalty at the end of the year. The good news is, the Affordable Care Act allow dependents to be enrolled on a parent’s plan up to age 26.
Here’s what you need to know about student health insurance.
For students on their parents’ insurance
Parents with students attending an out-of-state, or out-of-area college, need to understand how medical services are covered. If the parents hold an individual or family plan, most urgent care and emergency visits would be covered in-network while routine care for a physical, or other non-emergency condition, may be out-of-network and subject to higher out-of-pocket expenses. Maintenance prescriptions filled at an out-of-network pharmacy also would be subject to higher costs. Mail order prescription services could be a solution, but it’s important to know how often a physician’s visit is required before refills expire.
If the parents’ health insurance is part of an employer group plan, the coverage is likely to be more inclusive as many of those carriers are nationwide, such as UnitedHealthcare, Humana, Blue Cross Blue Shield or Aetna.
For students who cannot or choose not to be on a parent’s insurance
Students can always apply for their own individual plan in the state where they attend school, and depending upon household income, a premium tax credit could help reduce monthly premium costs. Students who are not claimed as dependents should always apply on their own, but if the student is under 21 and living with parents, household income for the student and parents must be reported on the application. Either way, it’s generally worth the effort to learn if a credit is available.
Lower-cost catastrophic coverage is also an option for adults under 30. These plans have high deductibles, but in the event of serious injury or sickness, they provide financial protection against extreme medical bills. These plans also meet the requirements to avoid an IRS penalty, but there are no subsidies available.
Short-term coverage is not qualifying coverage for purposes of an IRS penalty, but it can fill a need for some. Short-term plans can remain in place for up to a year under new Trump administration rules and can be renewed for up to three years. This ruling will be effective January 1, 2019. While short-term coverage is less expensive, it does not cover pre-existing conditions and has other limits that should be understood.
Some universities offer student health plans to affordably meet health insurance requirements and avoid IRS penalties. However, all plans vary so always verify the plan is considered qualifying health coverage.
Also, when making a health insurance decision, remember some schools have student health centers available at little to no cost, but those services are limited in scope and not likely to address serious or chronic care needs.
The college experience is one parents’ and students alike look forward to. While books, housing and other essentials are top-of-mind concerns, it’s important to have a game plan in the event a student needs medical care. If you have questions or need more information to evaluate what coverage is right for your student, call our Life Transitions enrollment service at 913.222.5520.