Advice for Recent College Graduates Seeking Health Insurance in California
Congratulations!! You’ve done it. You’ve either completed your formal education or the first part of your higher education. One drag about graduating however is that you are probably no longer eligible for your parents’ health insurance plan. In this article we’ll describe your options for getting health insurance, including:
- continuing coverage under COBRA/Cal-COBRA;
- getting a temporary plan; and,
- enrolling in your own permanent individual health insurance plan.
Option 1: Continuing Coverage under Your Parents’ Plan under COBRA or Cal-COBRA
COBRA/Cal-COBRA Most employer-based health insurance plans – the type that most likely cover your parents – only cover dependent children over age 18 while they are enrolled as full time students. If this is your situation, then when you graduate you become a “qualified beneficiary” according to the Federal law (COBRA) and the California state law for small companies (Cal-COBRA). COBRA and Cal-COBRA allow people to continue their health insurance when they’ve had coverage through an employer and are no longer eligible for that plan.
Terms to know. Technically, you are an “over-age dependent” and also a “qualified beneficiary.” This means that you must be offered the opportunity to continue your health insurance. There may be some exceptions to this but for the most part, you are guaranteed to get covered. It might be expensive but it also might be a good deal. The guarantee of coverage is very important because insurance companies some times decline coverage to people with pre-existing medical conditions. For a discussion of whether enrolling in COBRA is a good idea, see this article: Is enrolling in COBRA a good idea.
Impress your parents. Impress your parents with how much you have matured at college and show them that you are able to handle this on your own. (Feel free to call us toll free 800-746-0045 and we will walk you though what you should say to the HR person – you don’t have to tell your parents that you have an expert advising you.) You’ll need to contact the HR department of your parents’ employer to find out the specifics of your COBRA or Cal-COBRA coverage.
Key info you’ll need about your parents’ plan. You’ll need to know the monthly cost of the COBRA/Cal-COBRA coverage and the benefits of the plan. As a “qualified beneficiary” you are entitled to the same rights for your benefits as an active employee. Give the HR person your current address and they will send you the legally required COBRA notices. Ask for a “description of the plan benefits” and the monthly premium. Usually they can fax this to you immediately.
Don’t miss the dead line. There are specific time lines to “elect” COBRA coverage and then to pay. Make sure you understand these dead lines because – like the date of a final for a strict professor – there are NO excuses for missing the dead line. If you elect COBRA after the dead line, you are SOL, meaning you can’t enroll.
Option 2: Temporary Health Insurance
If you have a job that offers benefits and you are in the “waiting period” before coverage begins – and you are 100 percent certain that you will get the benefits on a specific date; then you may want to enroll in a temporary policy. Anthem Blue Cross, Health Net of California and others offer these policies. You can qualify more easily for temporary policies than for permanent health insurance plans. Also, you can specify the duration of coverage (up to 6 months.) If you only have a vague promise of getting group health insurance from an employer then enroll in a permanent plan or in a COBRA plan. Click here to get a quote for temporary health insurance (NOTE: make sure that you check the box under “Medical Plan Type” that says “Short-Term, Up to 12 Months of Temporary Coverage” – it is located next to the “show plans” button.)
Option 3: Selecting and Enrolling in your own Permanent Individual Health Insurance Plan
Enrolling in your own permanent individual health insurance plan may be a good choice. Here are a number of articles on individual medical coverage that will help answers many of your questions. These plans are “permanent” because once the health insurance company approves you then you can keep the policy as long as you pay for it. This permanence is a valuable feature. If you select a low cost plan you may want to keep the policy even after you obtain group coverage because you will have the security of knowing that you will never lose coverage.
Recent college graduates and those losing coverage through their parents should understand how their policy works and what it covers and does not cover.
How health insurance policies work: Generally there are two type of health insurance – HMO and PPO. HMOs are “Health Maintenance Organizations” and usually cover doctor office visits, prescription medicine, baby delivery and other items for low copayments. Because so many items are covered in HMOs they are usually expensive. The other type of plan is a PPO or “Preferred Provider Organization.” These plans usually have high deductibles which means that you must pay a lot of money before the insurance company begins paying your medical expenses. To learn more about these plans watch this video.
Key Concepts: To select an individual medical insurance policy you should focus on four things:
- How much you pay when you see a doctor;
- How much you pay when you go into the hospital;
- How much you pay for prescription medicine;
- What is the maximum that you will have to pay should you get really sick or injured.
Because this is insurance you will need to understand some “insurance lingo” to get this info. We have created short videos that explain these concepts. The video on “Key Benefits” will likely be the most help. Here is the insurance-speak for these key concepts:
- “Dr. Copay” is the amount you pay for a doctor to evaluate your health; get your medical history; diagnose your illness and recommend treatment;
- “Deductible” and “coinsurance” is what you pay when you go into the hospital;
- Separate copayments and deductibles apply to generic and brand name prescription medicine on most individual health insurance plans; and
- OOP, or the Out-of-Pocket Limit is generally the maximum that YOU will pay in a calendar year for your medical care. After you have met the OOP limit the health insurance company pays 100 percent of your medical expenses – with some exceptions.
Comparing and Selecting a Plan
Once you’ve gathered the information on the cost and benefits of your COBRA or Cal-COBRA plan and various individual permanent or temporary plans you should read this article and print the chart to help you compare plans. Also, you may want to read this article on where to start when selecting a health insurance plan. If you’re ready, get a personalized California health insurance quote. You’ll be able to standardize all of the variables and compare apples with apples. Knowledge is power and by following these steps you will know what you are purchasing and how to best use your plan. Don’t hesitate to contact us for advice and assistance. If you apply for a plan through BenefitsCafe.com we’ll become your agent at no extra cost. As your agent we’ll be able to help you should you ever have a question or problem.
Article date June 8, 2009