College graduates should consider options for health insurance
Devyn Bisson is a 22-year-old Orange resident about to graduate from Chapman University with a degree in film. She knows she’ll need to think about health insurance after graduation, but not just yet.
“It’s the last thing I’m looking at,” she says. “I’m way more preoccupied with how I’m going to make money.”
With graduation looming, college students have many big issues to face in the coming months. They may include signing up for health insurance, and facing deadlines and even fines for laggards.
For Bisson, signing onto her parents’ health plan — something millions of young adults have been allowed to do under the Affordable Care Act — isn’t an option, and her current job as a lifeguard in Huntington Beach doesn’t offer health benefits.
The student health insurance policy she now gets at school will expire this summer, leaving her without coverage.
“As far as what healthcare I’m going to buy,” Bisson says, “I have not looked at that.”
Few people like to think about health insurance until necessary, and that may be especially true for college graduates starting out on their own.
Open enrollment — the period during which you can sign up for a new health plan — is now officially closed, but many college graduates and others still may be able to buy insurance.
The government offers several exceptions for people to enroll during the year, even after enrollment closes.
These “qualifying events” include the birth or adoption of a child, marriage, divorce, losing eligibility on a parent’s health plan upon turning 26, and moving to a new area. The loss of work-based insurance, school-based insurance or Medi-Cal also count.
“Now that open enrollment is over, there must be a qualifying event, and losing a student health plan is one such qualifying event,” says JoAnn Volk, senior research fellow with the Georgetown University Health Policy Institute.
Not surprisingly, young people experience more life transitions that allow for special enrollment periods than other age groups, according to a recent report by Young Invincibles, a national organization that seeks to represent the interests of 18- to 34-year-olds.
Know what’s available
New grads fortunate enough to have landed a job should ask about health insurance at work. Those younger than 26 can stay on or be added to a parent’s health plan, if the parent agrees.
Consumers in California can shop Covered California, the insurance exchange set up under the Affordable Care Act. Individuals with incomes below about $45,000 a year may qualify for tax subsidies that help lower their costs.
Graduates earning less than roughly $16,000 annually may also be eligible for Medi-Cal coverage.
You have 60 days from the date of your qualifying event to sign up for a plan.
For example, if Bisson’s student health plan ends Aug. 31, she’ll have until Oct. 31 to select and buy a new policy.
If she doesn’t complete the process in time, she’ll have to wait until later this year to enroll in a plan that takes effect in 2015. She also may have to pay a penalty on her federal income taxes next year. Penalties amount to $95 or 1% of her taxable household income, whichever is greater.
Those eligible for Medi-Cal, however, can enroll at any time.
Plan your transition
If you’re covered by a college health plan now, check to see whether there is a grace period during which your plan will remain in effect after graduation.
“Every school is different,” says Barbara Rabinowitz, insurance manager at the UCLA Ashe Student Health and Wellness Center. Many university health plans, including the one offered by the University of California, extend through the summer after graduation.
For most qualifying events, you’ll need to enroll in a plan by the 15th of the month for coverage that starts the first of the following month. If you enroll after the 15th of the month, your coverage won’t start until the first day of the second month.
Be aware that you can’t take advantage of tax credits to buy a new plan through the exchange while covered by another insurance policy.
There are exceptions. If you’re eligible for a special enrollment period because you’ve lost an existing insurance plan through school or work or you’re no longer eligible for Medi-Cal, for example, new coverage will start on the first day of the next month, regardless of when you sign up.
Carrie McLean, director of customer care at EHealth, an online private health insurance exchange, says planning ahead is smart, no matter your circumstance.
“I think they should start 60 days ahead of time so they don’t end up going a month without coverage,” she says.
When buying coverage directly from an insurer rather than through Covered California, you’ll find varying rules with regard to buying a new policy in advance of losing your current one.
Some insurers allow you to buy 30 days in advance; others, 60 days. By law, people losing work-based coverage can sign up for a new plan 60 days in advance of losing their current policy.
Be prepared to show proof
If you apply for insurance through Covered California, you won’t need to show proof of your qualifying event. “Right now, our regulations do not require any documentation to be provided by the individual,” says Anne Gonzales, a Covered California spokeswoman. But, she says, “our regulations could change in the future.”
Proof of a qualifying event may be necessary if you buy insurance directly from carriers.
“Some carriers require proof, and some don’t,” McLean says. Those that do may ask for documents such as marriage and death certificates or letters that explain your coverage has ended; if you’re moving you may need to show a utility bill or driver’s license with your new address, McLean says.
Bisson, the soon-to-be Chapman graduate, says prior injuries have made her aware of how much medical care can cost without insurance. So she says she won’t go without coverage for long. As for her next steps, she says, “I’ll probably go talk to my dad, and ask him what I need to do.”
Resources and links
To sign up for California health insurance through the exchange: coveredca.com or (800) 300-1506.
To buy insurance with the help of an insurance broker, go to the California Assn. of Health Underwriters website at https://www.cahu.org, or visit ehealthinsurance.com or https://www.gohealth.com.
Zamosky is the author of a new book, “Healthcare, Insurance, and You: The Savvy Consumer’s Guide.”