In previous years, around this time in April, I’ve communicated to college parents about the “gap” that a graduating senior, or student taking a year off from school, would likely face in his or her health insurance, between the time of college graduation or end of classes, and landing that first job or going back to school full time.

This year, thanks to the new health care reform legislation, and the actions so far of a handful of major insurance carriers, that “gap” may be lessened, but the potential need for health insurance “gap coverage” still does remain for millions of young people.

Since you are a supportive parent, there is something that you can do about it. As part of your own final exam question to your student, please ask: Are you covered?

The first step is to evaluate your graduating student’s coverage under your policy. If you are a customer of UnitedHealth, Humana, or WellPoint and your young adult dependent child has been on your plan as a full-time student, it is likely that he or she will be able to stay on your plan. The reason: these three companies, and others who may follow, have said they will not wait for the effective date of September 23, 2010, at which time they are mandated to allow young adults to remain on their parents’ plans until age 26. Rather, UnitedHealth and Humana have decided to “bridge the gap” now in coverage for the young adults in their client families, and allow them to stay on their parent’s plan immediately or, in the case of WellPoint, beginning on June 1, 2010.

While these companies have enormous market share, there still remain millions of young people, ages 18 – 26, who may lose their current coverage when the commencement ceremony concludes. There could be many scenarios why this is the case. First, of course, you may not have health insurance yourself, or you may be a purchaser of a plan on the open market that will not allow you to add your child, whether he or she is a dependent or not. Or, you may be part of an employer-sponsored plan, but you’ve chosen to cover your student during college through either a school-sponsored plan or through a policy targeted to young people that you bought on the open market. Finally, adding your adult child to your plan may simply be too expensive and/or you may rather have them learn about paying for health insurance on their own.

The key point is that you may be part of an employer-sponsored or individual plan that, for fine-print or timing reasons may not allow you to bring a new person on to that plan until either September 23, 2010 or open enrollment season for that plan, whichever comes first. And, of course, most enrollment seasons tend to occur at the beginning of the calendar year. So the potential of a gap remains, for four to five months at minimum, or potentially longer.

New graduates and their parents can find a solution at www.GradGuard.com, a service of Next Generation Insurance (NGI) Group, and a partner of College Parents of America. GradGuard specializes in one-stop insurance shopping for young people, ages 18 – 34. The service is designed to cater to the needs of college students, new graduates and young professionals, matching them with appropriate insurance coverage at an affordable price.

In this particular realm, GradGuard compares rates with leading companies and offers short-term major medical health insurance, intended to provide an alternative bridge to the very real gap that a student may face between graduating, landing that first job, or being able to join your coverage, either on September 23 or during your plan’s next open enrollment season. Here’s what Bill Suneson, co-founder and president of NGI, recently told me: “Out-of-pocket medical expenses range from $80 for an office check-up to well over $5,000 for an unexpected emergency room visit, and that amount of money can be overwhelming to anyone, let alone someone who has just graduated from college.”

Having reviewed the policies of more health insurance companies than I care to count over the past few years, I believe that Bill Suneson, his partner John Fees and their team at GradGuard have done their homework to provide a solid alternative, so that the question of how to address health concerns does not become a life-altering financial risk for a young person. Another advantage of GradGuard’s short-term medical insurance is that it can be purchased month-to-month affordably, if a grad expects to find a job quickly.

John Fees frames the issue well: “Health insurance is often overlooked by college grads because they are distracted by the excitement of beginning the next chapter in their lives, and it is confusing and appears expensive. What we have done at GradGuard is to create an easy and affordable way to insure young adults – even in the short term – while taking the mystery and confusion out of the process.”

I hope you agree with Bill Suneson, John Fees and me that new grads can’t afford to NOT have health insurance and the peace-of-mind that comes with it. Please keep in mind the following caveats:

  • Short-term medical insurance is just that – for the short term. Permanent insurance options should be explored if there is no likely long-term plan to land on after the gap is bridged;
  • Short-term medical insurance may not be available in all states;
  • Short-term medical insurance, for now, may have pre-existing condition restrictions; and
  • Short-term medical insurance is not automatically renewed like permanent insurance.

If, after reviewing your family’s situation and determining that short-term major medical coverage makes sense, then please visit www.GradGuard.com/medical, and sign up your graduating senior today.

Want to help other parents sort through this topic or other challenges of college parenting? Please share your views by commenting below.

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