Health Insurance and Protection Options for New Grads

Health insurance is one of those things that most high school and college students don't even think about; however, after graduation, it's one of the most important things to consider. For college students, the option of remaining on a parent's plan exists, but for recent grads, the options change and may leave the new grad without needed health protection; however, health insurance protection is not an impossibility for those smart grads who understand the options.

First Job

Going out on your own is exciting, an one of the first experiences of a new grad is that first full time job. Many jobs offer great experience, but they also come with benefits packages. New grads can take part in their companies' group plans, which are less costly than individual coverage and can be paid for with pre-tax deductions from paychecks. For many graduates, this is a great option, but for those, who do not receive health insurance as part of an employment package, the solution for their insurance needs has to be found elsewhere.

Cobra

In the United States, federal law requires that health insurance providers allow continuing coverage those who ordinarily would be dropped from existing plans. This coverage, called Consolidated Omnibus Budget Reconciliation Act (Cobra), continues for up to 36 months and applies to the adult children of insured. Under COBRA, the health insurance carrier continues to offer coverage at the same price. The problem for a new grad, this option can be expensive depending on the insurance plan a parent or parents have. The great part about Cobra is that your coverage is not restricted by pre-existing conditions. gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.

College Health Insurance Plan

Most colleges offer health insurance options for students. These plans are generally part of the annual college fees. The general plans are not very expensive- usually a few hundred dollars per semester. Following graduation, a person can ask that their university or college plan be extended. This extension is done through "bridge policies" and possibly through Cobra. Check with health insurance plan administrators or the company directly to see if this option is available and affordable.

Health Savings Plans

We have all seen the AFLAC duck! There are insurance and service companies that offer people the option of setting aside money in anticipation of medical costs. Health savings accounts allow you to save money tax-free or cover costs under an pre-tax installment plan. Whether you are unemployed, self employed or employed with a company, you can use health saving plans. The catch for this option is in the fine print. For some companies, you are required to spend the money within the year or lose the unused balance.

Individual Insurance

Some new grads may have to opt for obtaining an individual policy not linked to their parents, employer or school. There are cost cutting choices that include short term coverage or high deductible coverage.

A short term health insurance policy can be obtained with a term of up to 12 months. Private insurers, through professional fraternities and alumni associations, offer these plans. They are flexible plans, but often don't give you the opportunity for extension or renewal.

The high deductible health insurance plan is as it sounds. You have coverage, but have to pay your deductible is medical treatment is sought. These plans don't cover the standard prescriptions, but are useful for major illnesses that may involve trips to the hospital.

Legislation

With the new debates on health care, other options may be available. New federal legislation will allow adult children, if living with parents, to remain on their parents' coverage until age 26. Some states, like Texas, New Jersey, South Dakota, New Mexico, allow for coverage to extend beyond graduation. For New Jersey, the coverage can continue to age 30, but for states like Texas, the coverage stops at 25 year of age.

Health Insurance coverage needed be a big issue for the new graduate. There are affordable and flexible options that have pros and cons; however, they will leave the new grad breathe easier.

For more guidance, check out the following websites and resources:

http://www.distance-education.org/Articles/Health-Insurance-For-College-Students-and-Recent-Grads--A-Look-at-Your-Options-75.html

http://www.dol.gov/dol/topic/health-plans/cobra.htm

http://www.ustreas.gov/offices/public-affairs/hsa/

http://www.whitehouse.gov/issues/health-care

https://www.uhcsr.com/