Health Insurance Issues for the New Graduate

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If you are graduating high school or college this month, this column is for you. If your children or grandchildren are, cut it out of the newspaper and tuck it into their graduation card!

First, congratulations on graduating! As everyone has told you - that is most exciting! What they might not have told you though, is that while you are busy preparing for a job, or college, your health insurance may have just expired. Most policies will cover dependent children until the age of 19 (23 if a full time college student). Be sure to find out now if you are still eligible to be covered under Mom &/or Dad’s policy.

Being covered as a dependent on a group plan is the least expensive way to go for health insurance right now and you will certainly want to take advantage of that status for as long as possible. If you are heading off to college, the health insurance carrier will ask for a form from the college registrars’ office stating that you are enrolled as a full time student for the upcoming semester. This document needs to be obtained each semester and submitted to your health insurance carrier. If you do not submit proof of full time college student status, claims will be rejected stating you are no longer enrolled under the plan.

If you find out that your coverage did terminate with your graduation, you have several options:

Get a job that offers health insurance coverage. Of course, you don't want that to be the first question you ask a potential employer in an initial interview, but it needs to be addressed at some point. If you already obtained a job with a company that does not offer health insurance benefits, keep reading!

If you were covered under your parents’ policy through college, you may be able to continue your benefits for 36 months under the COBRA law, as long as your parents work for a company with 20 or more employees. (You will pay the premium plus 2% for administrative costs.) It is your parents’ responsibility to notify the Employee Benefits Department of the company through which they are employed to let them know that you are no longer a full- time student, and that you wish to consider continuation of your health insurance under the COBRA law. They will be able to tell you what the premium will be.

If you are graduating from high school and are not intending to further your formal education at this time, and if you are 19 years of age, chances are, you will have to come off of your parents’ policy and purchase one of your own. However, this depends on the company with which your parents have their health insurance. Some companies will terminate an adult child when they turn 19 if they are no longer a full-time student, yet other companies will continue dependent children through age 22 or 23. It is your responsibility to find out how long you can be covered under your parents’ policy.

If you are considering staying on your parents’ policy under the COBRA law, you should compare the premium and benefits to that of an individual policy you purchase on your own. If you are not eligible to continue under COBRA, you will need to investigate these individual plans. In New Jersey, you can purchase an individual, comprehensive health insurance policy for approximately $370 and up, depending on the plan.

If you get a job with a company that does offer health insurance benefits, be sure to find out when you will be eligible to go on the plan. Most companies require that an employee work for a given period of time (i.e. 3 months, 6 months, etc.) before they are eligible to be on the health insurance plan. If this is the case with your new employer, make sure you are covered under either your parents’ plan or individual plan until that time is up.

You might be thinking that you cannot afford $370 a month for health insurance. You can lower the premium by choosing a higher deductible. You also might be asking yourself, “What do I need health insurance for? After all, I’m young and healthy!” Unfortunately, health insurance isn’t something that you purchase when you get sick. The best time to purchase health insurance is when you are young and healthy. Youth does not guarantee good health. Don’t be lulled into believing that you are invulnerable and will not get sick. Illness can strike anyone, at any time. It does not discriminate based on age, ethnic background, or social status. Health insurance is a mandatory expense in life; it is not an option, but rather, a necessity.

Irene Card & Betsy Card Chandler share the responsibilities of running Medical Insurance Claims, Inc. a health insurance services company . If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828, or visit our contact page.