Insurance for Graduates

Insurance for Graduates

It is that time of year again when we think of graduation parties and June brides. Graduation signifies a milestone in someone's life but it also means health insurance status changes.

Graduation is a happy time. But with graduation comes the need to make numerous decisions: What is the next step? More education? A job? Another big decision that often coincides with graduation and is easily overlooked is health insurance!

Most group insurance plans allow a child to stay on the health insurance plan until age 19 or, if you continue your education and are a full-time student, most plans allow you to stay on the plan until age 23. Be sure to check your health insurance plan to see what the age limit is. Many plans will terminate the college student coverage the day of graduation! Of course, this is done retroactively, after the fact, because they do not know when students are graduating. But when they find out you had better have a plan.

Full-time college students on their parents' insurance plan must provide proof of full time status every semester. Most insurance plans want an original document from the registrar's office with the raised school seal on the document.

If you are not continuing your education upon high school graduation, be sure to check the age limit for staying on your parents' plan. Most plans are 19, some are 22 or 23. We have three laws that allow the adult child to stay on the parents' plan for a limited period of time. If the parents work for a company with less than 20 employees, (Consolidated Omnibus Budget Reconciliation Act) COBRA, or Mini-COBRA as it is sometimes called, allows children who are no longer eligible to be on the plan to continue their benefits for up to 36 months.

They can only stay on the plan until they are eligible to go on another group plan. COBRA is a law; it is not an insurance company. This law allows you to continue benefits for a specified period of time and you are responsible for the entire premium.

You get the same benefits as the rest of the company employees. It is the parent's responsibility to notify the employer that a dependent child is no longer a dependent and that he/she wishes to continue benefits. There is also a newer law, known as the Continuation of Coverage for Eligible Dependents Until 30 Years of Age.

As of this writing, the insurance carriers have not yet determined the premium structure for this age group. It is anticipated that it will be higher than the single rate for COBRA coverage but, until the rates are approved by the Department of Insurance, we are encouraging our clients to continue benefits under N.J. COBRA or COBRA. By the time those benefits expire, if your adult child still needs health insurance, the rates will be well established and they can continue benefits from that point on to age 30. As stated in the above paragraph, COBRA is a federal law and it applies to companies who have 20 or more employees. NJ COBRA is a state law and it applies to companies with less than 20 employees. It is almost identical to the federal COBRA with a few minor exceptions which I will discuss in another article.

Many colleges and universities offer student health insurance. All of these plans vary dramatically so I cannot comment on any plan without seeing the specifics. Most of these plans have very limited benefits and they may or may not cover preexisting conditions. Be sure to read the small print carefully. If it is inexpensive, chances are the benefits are meager. You usually get what you pay for.

The last option is to purchase individual health insurance. This is usually more expensive than staying on a group plan. For more information on this option, call your insurance agent or this office for more particulars.

Irene Card & Betsy Chandler are both licensed insurance professionals working at MIC Insurance Services, 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, browse our past columns on our web site at www.micinsurance.com.

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