Back to School 2022: K-12 & College Insurance
By Michael Giusti
Schools from colleges to pre-K are gearing up for another year, and students at each level all have insurance needs that need to be considered.
From health to auto to tuition coverage, and even possibly life insurance, a wide range of policies are available to help protect students as they return to the classroom. This guide will serve as a checklist for many of the back-to-school insurance needs a family might face.
College Health Insurance
Most colleges require students come to class with health coverage as a condition of enrolling. Some schools offer up their own policies, while some students opt to stay on their parents’ policies. And other students take out entirely new policies through a health care exchange.
Which scenario makes the most sense? That depends on many factors.
The first thing to keep in mind is that the simple act of moving to attend school in another zip code means that families can make changes to their health insurance because it is considered a “qualifying life event.” That allows them to alter policies even though it isn’t during the annual open enrollment period.
If a student’s family already has insurance, whether through a parent’s employer plan or through a healthcare.gov marketplace plan, staying on that plan is typically the least expensive option.
But just because it is the least expensive doesn’t mean it is automatically the right answer.
The first factor families need to consider is the health insurer’s coverage network — which is especially important if the child is leaving home to go to school.
While a policy may be terrific at home, it may have an incredibly limited list of providers available at school, especially out of state — if there are any at all.
Many employer-based plans have “preferred provider networks,” which may offer coverage out of state, but it is essential to make sure each doctor the child may need is in the area and accepting new patients.
Alternatively, some plans allow families to purchase an out of state coverage option for an additional cost.
Without verifying coverage, if a student goes ahead and keeps a parent’s plan and then gets sick, that may mean a pile of out-of-network charges — if it is covered at all.
On the bright side, emergencies are always covered, regardless of where the person is in the country. The sticky point is whether the insurer will consider the visit a true emergency. If it is just considered urgent care, the student may be left holding the bill.
Prescriptions are also important to consider. Mail order may be an option for many maintenance medications. But having access to a national pharmacy network is going to make refilling prescriptions — especially controlled substances — easier for the whole family.
If the student has a trusted provider, such as a mental health therapist, it may be worth pursuing telehealth as an option to stay connected with that provider after heading off to school.
If staying on a parent’s plan doesn’t make financial or logistical sense, most universities do offer a school-based plan offered by a partner company. In many cases those plans are automatically added to the fall semester tuition bill.
These can be an affordable alternative, and in most cases count as qualified coverage according to the Affordable Care Act.
If families are considering a school-based plan, they should go through their checklist of possible care their child may need while at school to ensure everything is available and convenient, whether that is allergy treatment, mental health, or help with a chronic condition.
A final option would be to get the child their own plan through the healthcare.gov marketplace. Even if the child’s parents have their own plan, the student would be eligible for their own plan if they have moved away.
As long as the child is younger than 26 and a dependent, both their income and their parents’ income will be considered to calculate any subsidy.
If families choose any option other than the school-provided plan, they should make sure to let the school know. Because school plans are often automatically added to a tuition bill, families who provide proof of other coverage can be eligible to get that portion of their bill waived.
K-12 Children’s Health Insurance
Back to school is an important time to think about insuring younger students as well.
If the child does not have insurance, their parents can apply for a Children’s Health Insurance Program policy. Unlike many other health insurance policies, there is no open enrollment period for a CHIP plan, so parents can apply any time. CHIP policies are typically free or low-cost to the family.
Regardless of whether the child is insured through CHIP, a marketplace plan, or through an employer-provided policy, they should be covered for checkups, doctor visits, vaccinations, prescriptions, dental/vision, and hospital and emergency care.
That vaccine portion is important this time of year because most states have a list of required vaccines children need to have in order to be enrolled. Thankfully, all Affordable Care Act-compliant polices cover federally recommended vaccines at no charge. That includes the state-required childhood vaccines, the flu vaccine, meningitis vaccine, and even the COVID-19 vaccines and boosters.
If the student is going to participate in sports, parents also need to make sure they get their physical checkup.
ACA-compliant plans all cover one annual checkup a year at no cost to the family. And while an athletic physical and an annual physical may sound the same, parents need to make sure they aren’t confusing the two. The annual checkup is a well-child visit to ensure general health, while the athletic physical determines a child’s readiness to compete in a sport.
If parents coordinate the two and have their provider do both exams at the same time and fill out the paperwork during the annual checkup, insurance may cover it free of charge. But if parents do them separately, they will likely have to pay an additional co-pay, and depending on the policy, may need to pay for the entire trip out of pocket.
Families need to think through their vehicle situation when it comes time to head off to college. They need to decide whether it makes sense for their student to bring a car to campus or leave it at the parents’ house, relying instead on a bicycle, public transportation, or ride share apps to ferry their college student around town.
Bringing the car may give autonomy and freedom, and may be a practical necessity depending on where the campus is located. But bringing a car also likely requires a costly parking pass and to coordinate those logistics with a college student’s auto insurance.
If the child leaves the car behind and goes to school at least 100 miles away, they may be eligible for an auto insurance discount, depending on the insurer. That is because with that much distance, many insurers assume the car will just be sitting in the driveway for most of the semester.
If the car is staying parked at home, it may also make sense to switch to a usage-based insurance plan, which would use an on-board sensor to see how many miles the vehicle is being driven, and only charge the family for the actual time it is on the road.
If the child does decide to bring it, they need to update their agent to let them know the new location of the vehicle – which may have cost implications. If the school is in a more costly ZIP code than home, their rates may go up.
Some states and/or insurers may require an out-of-state student to have a separate policy, so it is important to talk the scenario through with the agent. And in some rare cases, the school may be in a much less expensive ZIP code than home, making a separate policy less expensive.
As a rule, staying on a parent’s policy is usually the least expensive option, but to qualify for that, the student does have to be still technically living with the parents – once they permanently move out, they aren’t eligible to share the policy. Changing voting registrations or driver’s licenses may lead to those consequences, so they should make sure to talk through with the agent about which life events qualify as a permanent move.
Many insurers do reward honor roll students and give good-grade discounts, so it doesn’t hurt to brag about a good report card to the agent while they are at it.
College & Renters Insurance
When they head to school, students also need to protect their stuff. And while they may feel poor, college students have a whole lot of valuable belongings, be they bicycles, computers, phone, books, clothing, or electronics.
And if something happens to that stuff, it is the student’s responsibility, not the college or landlord.
Students who live in the dorm may be able to get some coverage through their parent’s homeowner’s insurance. But beware of the deductible. While a $1,000 deductible may make sense for a home, that wouldn’t leave much coverage if a dorm room were to catch fire.
Another thing to keep in mind is coverage limits. A homeowner’s policy may protect $100,000 in property at the home, but they may have an off-premises clause limiting protection for things outside the home to $10,000.
And the parent’s homeowner’s policy never covers students who live in off campus apartments.
This is where renter’s insurance comes in.
Renter’s insurance costs a fraction of what homeowner’s policies do — often less than $25 per month — and they have lower deductibles, so things like a broken computer or phone screen may be covered instead of just eaten up by the deductible.
Renter’s insurance also covers liability, like if a student accidentally causes a fire by overloading an outlet or sets off a building’s fire suppression system by hanging their laundry from the sprinkler head.
Renter’s policies also cover medical payments if someone gets hurt while in your apartment, like say they fall off a balcony or down the steps.
Just like with homeowner’s insurance, though, floods and earthquakes aren’t covered by renter’s policies. So, if a student is living on the eighth floor of a dorm in Ohio, flood or earthquake insurance may not be an issue. But if they are in more seismically risky areas or in a basement apartment, buying a separate policy is an inexpensive way to avoid these risks.
College Tuition Insurance
Things happen, and sometimes students have to withdraw from university because of a medical emergency. At most schools, asking for a refund can only happen in the first few days of class. After that, they are on their own.
That is where tuition insurance comes in.
Tuition insurance refunds a portion of the tuition, room, and board costs if the student unexpectedly can’t finish the semester for a covered reason. In most policies that is a medical emergency, an ongoing chronic health issue that keeps the student from staying in school, or a mental health crisis.
These policies step in and make the families whole for the un-refundable portion of tuition after an unplanned withdrawal due to a covered issue.
Whether they are worth it comes down to each family’s risk, but it is important to note that none of them will pay out if a student just chooses to drop out or withdraw, even if it is because of a fear of a pandemic.
Travel and Abroad
Spring Break trips are iconic, but they can also be risky.
If a student is planning a getaway to the beach, travel insurance may be worthwhile, depending on a few details.
First, the cancelation portion of travel insurance covers the un-refundable portion of the trip if it is called off unexpectedly for a covered reason (such as a natural disaster.) So, if the trip is to an all-expenses-paid resort and they have to put down a substantial portion up front, then a travel policy may make sense.
But second, the health insurance portion may be worth considering, especially if the student’s insurance coverage area is limited.
For longer trips, such as study abroad, students may need a specific health insurance policy that covers the specific country of origin they are traveling to. These policies may be available through their existing medical insurance provider, or the student may need to shop around to find one that will cover them.
Their school’s study abroad office will have resources to find appropriate coverage.
One clause to look at closely when it comes to travel and study abroad coverage is medical evacuation. This is coverage that will help get the student back to a facility that has the resources to treat them properly, which is especially important if a remote destination is on the itinerary.
College Life Insurance
College students aren’t the typical demographic that comes to mind when it comes to thinking about life insurance. That is because life insurance is meant to replace someone’s income if they die, and college students aren’t known for having huge incomes, or many dependents relying on them.
But there are exceptions.
Increasingly, parents are heading back to school, and if someone has children, a life insurance policy can be a worthwhile tool to ensure they are taken care of if the worst happens. The same goes if a student is providing for dependent parents.
It is also a different story if the student’s parents are helping finance their education through private student loans.
Federal student loans, including Parent PLUS loans, are discharged upon death. In the case of the PLUS loans, either the student or parent’s death can trigger discharge
But when it comes to private loans, they have no such automatic discharge if someone dies.
In these cases, a term life insurance policy may make sense to make sure that the student’s parents don’t get stuck with a huge college debt if the student dies prematurely.
Heading back to school is exciting and a great opportunity for renewal.
Finding proper coverage for health, auto, travel, and life can help make that opportunity a bit less risky. And hopefully this checklist gives students and their parents the perspective to make those decisions.