Student Health Insurance Coverage: The Rules, And When It Beats A Parent’s Group Plan
Student health insurance is a special kind of individual coverage that a school arranges with an insurer. It follows its own federal rules, and it is one of several ways a student can be covered. Here is how it works and how to decide between it and a parent’s employer plan.
What To Weigh.
General information, not legal or tax advice. Check the cited sources before you act.
Student Health Insurance
The overview of the coverage and who it serves.
Dependent Coverage To Age 26
How group plans cover adult children, student or not.
Michelle’s Law
Protection for dependent students who take a medically necessary leave.
How The Federal Definition Works.
Under 45 CFR 147.145, student health insurance coverage is a type of individual health insurance coverage provided under a written agreement between an institution of higher education and a health insurer. It covers students enrolled at the school and their dependents.
Three conditions define it. The coverage is offered only in connection with enrollment as a student or as a dependent of a student. Eligibility cannot depend on a health status-related factor of the student or dependent. And it must meet any additional requirements under state law.
Where The Rules Differ From Other Individual Coverage.
Student plans are exempt from the single risk pool requirement. An insurer may create a separate pool for a school, provided the distinction is a bona fide school-related classification and not a health factor. Rates must reflect the pool’s own claims experience, and any adjustment within a pool must be actuarially justified.
Insurers do not have to accept non-students or renew coverage for former students, and they do not have to use a calendar policy year. Benefits must provide at least 60 percent actuarial value, and plan materials must state the actuarial value and the level of coverage the plan would otherwise meet. Student administrative health fees are not treated as cost sharing for the preventive services that federal law requires to be covered without it.
The Choice Families Actually Face.
A dependent student often has two options: stay on a parent’s group plan, which must cover an adult child to age 26 under federal rules, or use the school’s plan. The group plan has the advantage of a continuing relationship with the family’s doctors, while the school plan is designed around the campus and may have a limited network away from it.
Distance is the usual deciding factor. A student at a school far from home may find the parent’s network thin where the student lives, and a campus clinic and local network easier to use. A student who attends locally may be better served by the group plan.
Where To Begin.
For an employer, ask which employees have dependents at schools outside your plan’s network area, and whether your carrier’s national network or out-of-area benefit covers them. This is a common reason an employee asks about the school plan.
For employees, compare the group plan and the school plan on the doctor the student will actually see, the cost to the family after any premium paid through payroll, and what happens when the student takes a break from school.
Check the school’s waiver or opt-out process before the deadline. Schools set their own, and missing it can mean the student is enrolled in the school plan by default.
Common Misreadings.
A student plan is not a group health plan for a parent’s employer. If a dependent leaves the group plan for the school plan, the employer plan simply has one fewer covered person.
Student coverage ends when the student stops being enrolled. Insurers are not required to renew it for a former student, so graduation is a coverage event that families should plan for.
Michelle’s Law protects a dependent student on a group plan who takes a medically necessary leave. It does not apply to a school-run student plan.
Related Guides.
Who Michelle’s Law Protects
The students and plans the law reaches.
Dependent Age 26 Calculator
Find the date a dependent ages out.
Dependent Eligibility Verification
How employers confirm who is covered.
Laws And Sources
45 CFR 147.145: Student health insurance coverage.
Public Health Service Act Section 2714, 42 U.S.C. 300gg-14: Dependent coverage of children to age 26.
ERISA Section 714, 29 U.S.C. 1185c: Continued coverage for dependent students on medically necessary leave.
General information, not legal or tax advice. Check the cited sources before you act.
Quick Answers.
Short replies on this page’s topic, each tied to a fuller guide.
What is student health insurance coverage?
Individual coverage provided under a written agreement between a school and an insurer for enrolled students and their dependents, offered only in connection with enrollment.
Can a student plan charge more for a student with a health condition?
No. Eligibility cannot depend on a health status-related factor. Insurers may create a separate pool for a school, but only on a bona fide school-related classification.
Can my child stay on my group plan instead?
Yes. A group health plan that covers dependents must cover an adult child to age 26, whether or not the child is a student.
Does a student plan have to renew after graduation?
No. Insurers do not have to renew student coverage for a former student.
Does Michelle’s Law apply to a school plan?
No. It applies to a dependent student covered under a group health plan who takes a medically necessary leave of absence.
More On Dependent And Student Coverage.
Michelle’s Law Leave Checklist
Steps when a student takes a medical leave.
Plan Documents And Age 26
How the rules appear in your plan documents.
Spousal And Dependent Rules
Eligibility rules for dependents.
Dependent Coverage Cost Calculator
Model the cost of covering dependents.
Adult Children And Imputed Income
Tax treatment for non-tax-dependent coverage.
Section 127 Student Loan Assistance
Employer help with education debt.
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