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Health insurance for new college grads

Consumer Reports News: May 29, 2013 05:04 PM

Along with welcome transitions in life like college graduation come less welcome questions, like: What the heck am I going to do for health insurance now?

That question is not nearly as scary today as it was before 2010, when it was common for health insurance companies to kick children off their parents' plan the minute they graduated from high school or college. That doesn't happen any more, thanks to the Affordable Care Act's popular provision that allows young adults to stay on the parental plan until they turn 26.

If you've been covered under your parent's plan all through college, and are not yet 26, you don't have to do a thing. The "under-26" provision applies regardless of whether you're moving back into your childhood room or to an apartment halfway across the country. It applies even if you get a paying job that doesn't come with health benefits.

Here's what to do if you're over 26 or otherwise don't have access to a parental plan (for instance, if your parents are on Medicare):

Continue your student insurance. College health plans are much more generous than they used to be, thanks to other provisions of Obamacare. Check to see when yours runs out; it most likely lasts at least until the end of the summer. If you don't have another option by then, find out whether the student plan will allow you to buy continuation coverage. Many do.

Stay on your parent's plan through COBRA. After you age off your parent's plan, you can still stay on it for up to 36 months more but will have to pay the full cost of the premium yourself.

Got a health insurance question for me? Ask it here. Please include the state you live in.

Buy an individual plan. If you're young and healthy, in most states you'll be able to pick up a plan for a reasonable amount of money. Here's advice on how to buy health insurance on your own.

Know your rights if you get a job with benefits. Employer plans are allowed to exclude coverage of your pre-existing conditions for up to a year. But a federal law called HIPAA can shorten that period or even eliminate it altogether. HIPAA says that if you have had prior "creditable coverage," which an employer, college, or individual plan most definitely is, the "pre-ex" exclusion period will be shortened by as many months as you have had the coverage. So if your new job has a plan with a 90-day exclusion period, and you've had previous coverage for longer than that, presto, the exclusion period vanishes!

Remember this is all temporary. Whatever you cobble together for non-employer coverage will only have to last you through to the end of the year. As of Jan. 1, 2014, the full provisions of the Affordable Care Act take effect. Starting Oct. 1 of this year, you'll be able to visit your state's online health insurance marketplace and select a high-quality, comprehensive plan which you can buy regardless of your health history. You can get a subsidy to help pay for it if your income is less than about $45,000 a year. Here's more advice on how health care marketplaces will work.

Nancy Metcalf

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