Issues For Young Adults: Student Health Plans and Coverage on Parent’s Health Plans

In recent years, many colleges have begun requiring proof of health insurance for students. Coverage options include insurance through family policies, Medicaid, the individual market, and coverage through school-sponsored student health plans. In addition, many students can purchase coverage through health insurance Marketplaces, and most will qualify for premium tax credits and cost-sharing reductions to make that coverage more affordable. While historically there has been a wide variation in the cost and benefits provided by school-sponsored plans, under the Affordable Care Act most student plans are required to provide some important consumer protections, such as:

  • Student plans may not impose an annual cap on prescription drugs and other health coverage, meaning they can’t cut off paying for students’ care if they get really sick.
  • Student plans are now required to provide free preventive care, such as free HIV testing, pre-exposure prophylaxis (PrEP), STD testing, and birth control.

However, some types of student plans offered by colleges and universities are exempt from consumer protections under the Affordable Care Act. These are called “self-funded” student plans, in which the sponsoring college or university bears the financial risk for the health costs of enrollees. Students should be aware that there can be significant differences in the cost and benefits of these plans, and some plans may not provide adequate financial protection if a student gets sick or injured.

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