Your child left for college? Take Insurance Tips 101

Your student has already started the fall college semester. You've paid the tuition (whew!), and your eager Einstein has even selected a major.

Now, what about insurance?

Insurance isn't an obvious concern when planning for college -- though it should be. Once they go to college, students' health-, auto- and property-insurance needs change radically, and you'll need to take the right steps to make sure they're fully protected.

In some cases, moving to college might leave them without sufficient coverage to protect their health or property. Insurers need to know when kids go to school, too. Failing to notify them could put certain family policies at risk. On the other hand, a student's departure might present opportunities to save on existing insurance premiums.

So while your student takes classes in her new field of interest, let's take a quick refresher course on Insurance Tips 101.

Health coverage: It's a requirement 
Students at Emory University this year face a new requirement -- and it's not a mandatory course in science. Rather, the historic Atlanta school requires its students to have medical coverage. Those who are uninsured, or those whose insurance doesn't meet the college's requirements, are automatically enrolled in the Emory Student Health Insurance Plan, underwritten by Aetna. Premiums run about $1,800 for a year of coverage. This year, roughly 37 percent of the school's 11,700 graduate and undergraduates are enrolling and paying for coverage, says Dr. Michael Huey, executive director of Emory's health care services.

"We need students to be healthy to complete their academic career," says Huey, who notes that prior to this year, just select groups of students (such as those in the medical school) had to be insured.

It turns out Emory's not alone. Other colleges are mandating that their students get medical insurance, too, and some states are getting into the act as well. In Massachusetts, for example, all college students must be medically insured.

Officials aren't simply concerned about maintaining overall campus health. Economics is driving the trend, too. Specifically, when uninsured students get sick, and they need laboratory tests, medical treatment, mental health counseling or other treatments, they either do without, get stuck with bills they can't pay -- or sometimes leave universities to shoulder their unpaid tabs.

The good news is that school-sponsored insurance, while not free, is usually a good deal. Colleges invite insurance companies to design plans for their schools and bid on winning a contract. Prices and the specific benefits of school-sponsored plans vary from campus to campus, of course, with some available for as little as $1,200 a year. The competition to win school contracts, among insurers, helps keep prices in line for plans that might offer more comprehensive services. At Emory, for example, the Aetna plan gives students access to some 3,700 hospitals and a choice of some 750,000 physicians worldwide, says Huey.

So, is college-sponsored insurance right for your student? First, you'll need to determine if you have to buy it.

Review your health policy and ask yourself the following:
  • Has your child outgrown the plan? Typically, a family's insurance plan (through a parent's workplace) covers full-time students, but only up to age 21, though the age limit can vary between 18 and 24.

    That was the case for Dee Lee, a Certified Financial Planner and co-author of "Let's Talk Money" who has evaluated college-sponsored insurance as a professional. Lee also purchased college-backed insurance when her own policy stopped covering her kids on their 18th birthdays. Lee says she was more than impressed with the policies, especially when her daughter was injured one summer, and her insurance through Tufts University covered the tab.

    "She got whacked on the head and needed stitches," says Lee. "But what I liked about the Tufts plan is that it extended from September to September, so she was covered even though she wasn't at school."

  • Do you have an HMO? If your child attends school as an out-of-state student, he might have to go outside the network to see health professionals. Not only will that cost you more, he'll likely face the hassle of obtaining referrals to see an out-of-network doctor.

  • Does your policy meet school standards? Some colleges might require students' health insurance plans to meet their criteria in order for the students to opt out of the campus-sponsored varieties. At Emory, for example, a student has to have a policy with a deductible of $500 or less. An exception is made if a student's family has a health-care savings account to ensure that they can pay the unpaid portion of their bills before the deductible kicks in. If they don't meet those standards, then students must buy the Emory plan through Aetna. No exceptions are made, even if a family insists they can afford to pay high out-of-pocket costs.



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