Are Your Kids Protected?

By: AnnaMarie Mock, CFP®

With the fall semester fast approaching, there are many last-minute decisions and preparations being made for the next wave of freshman students. However, one decision that may have fallen to the wayside is health insurance for the incoming student. An important question to ask is “will my child be covered under my medical insurance once they go off to college?”

The Affordable Care Act of 2010 was designed to expand Medicaid eligibility, establish health insurance market place exchanges, and extend coverage to more individuals. Under the Affordable Care Act, dependents can remain on their parent’s coverage until the age of 26, regardless of marital status. This age limit applies to individual, market, and employer plans. However, there is a caveat for children traveling to schools not within state. There is a possibility that the existing group or individual plan may not cover your child in a different city or state.

Every plan is different, so you should contact your current insurance company to obtain details about the out of state coverage. If the coverage does encompass out of state medical events, then remaining on the plan may be the best option. For medical insurance that will not extend, there are other factors that may affect the coverage and pricing. There may be higher out-of-pocket costs or limited coverage if there are no in-network providers in the new location. There is some flexibility offered with preferred provider organization (PPO) plans, as they provide some coverage for out-of-network providers, but the copayment, deductible, and general out-of-pocket expenses may be much higher. Health maintenance organization (HMO) plans generally do not offer any coverage for out-of-network providers except in emergencies.

Many colleges offer student medical plans for basic medical care through the school’s own policies or in partnership with an insurance carrier. Like tuition and room and board, medical premiums can be paid through student loans if needed. You can contact your school for specific details on coverage, as it may have limits.

Private insurance carriers also offer medical plans that are dedicated to students. Private insurance plans often fall under the categories of “major medical insurance” or “short-term medical insurance.” Major medical plans meet the minimum essential guidelines that have become the standard for student insurance. This includes, but is not limited to, ambulatory, emergency, mental health, and preventative services. Short-term policies are also offered but are limited in scope and usually do not include the minimum essential guidelines. Most student plans only provide coverage during the school year.

If your current insurance is not a viable option, you have to carefully consider your particular circumstances while applying for individual or private insurance. There are many factors that play a role in coverage selection, but below are some questions to consider when evaluating the options.

· Does the student have a chronic illness or condition that requires continuous monitoring?

· What are the deductibles and co-pays for regular office visits and emergency room services?

· Does the student need prescription coverage?

· What is the potential out of pocket maximums?

Once the medical coverage is in place, your child should be familiar with the doctors that are available in the event of an emergency. You can visit your health insurance website to find in-network doctors and facilities near campus. In many instances, there are on campus health centers for students, but this may not be included in the list of in-network providers.

Often students and parents choose the option that has the lowest cost. However, you should think carefully about your child’s health needs and risks in addition to price when evaluating health insurance options. If you have any questions, please feel free to reach out to the HIGHLAND team.

Author’s Bio:

AnnaMarie Mock is CERTIFIED FINANCIAL PLANNER™ at HIGHLAND Financial Advisors, LLC based out of Wayne, NJ. HIGHLAND Financial Advisors, LLC is a Fee-Only financial planning firm that offers comprehensive financial planning, retirement planning, employer retirement planning, and investment management to help clients focus on what matters most to them.

AnnaMarie graduated from Montclair State University with a degree in finance and management and successfully passed the CFP® national exam in 2016. She has been working at Highland Financial Advisors since 2013 as a financial planner and is involved with Upswing Advisor, a platform dedicated toward creating a solid financial foundation for young professionals. AnnaMarie is a member NAPFA and the XY Planning Network.