Plan for Your Health

• Do Your Health Benefits Work For You?: Sign up for your FREE guide!
• What Is a PHR? And Why Do I Need One?

Ready for the Real World?

Make Sure Health Benefits Are a Part of Your College Graduate's Plan

With more than 1.5 million students from the class of 2008 expected to graduate, many parents and college grads are gearing up to celebrate. However, there may be unexpected costs they are not counting on during this transition into the "real world."

In fact, many college graduates are unprepared for the cost of health benefits since only about 51 percent of graduates in 2007 had jobs at the time they graduated. While getting that first job increases financial stability and access to employer-sponsored health benefits, not all employers provide health insurance or there may be a waiting period to receive benefits at a new job. As a result, many parents may find themselves chipping in for health care costs until their child becomes part of the working world.

To find out what parents are thinking about health benefits during this important transition, Aetna and the Financial Planning Association surveyed parents of upcoming and recent college graduates to better understand their concerns and gauge how much they know about their child's health insurance after graduation. These survey findings are especially relevant since 13.3 million young adults between the ages of 19 and 29 were without health insurance coverage in 2005, making them one of the largest and fastest growing groups without coverage.

Are you a parent of a recent or future college grad? Check out our top five survey findings and advice for saving time and costs now:

1. After college, many graduates are no longer eligible as dependents under their parents' health insurance plan. This survey found that parents want to be supportive but don't know enough about their health coverage and are not taking the time to learn about it.

   In fact, 83 percent of parents of an upcoming graduate say their child will not be covered under their health insurance policy or they are unsure of their provider's rules and policies concerning college graduates, but more than one-third (37 percent) have spent time no time researching or discussing health insurance.

2. Most parents are waiting until after graduation to discuss health insurance. For example, more than two-thirds of parents of upcoming graduates have spent no time researching health insurance coverage for their child. However, parents of recent graduates are three times more likely to spend two or more hours researching health insurance coverage for their graduate than parents of children who have not yet graduated.

   Planning ahead is key in making sure college graduates have the health coverage they need. In most cases, advance research and planning can prevent confusion and difficulties down the road.

3. Of the parents surveyed, most think they will not be responsible for paying for their college graduate's health benefits. Almost half of the parents surveyed (49 percent) think that their child's future or current employer will be responsible for paying for their college graduate's health benefits.

   Parents, however, need to consider that about half of college graduates will not have jobs by the time they graduate. In this case, grads who are under their family's plan are eligible for COBRA coverage for a maximum of 36 months. Graduates who have an individual policy through their college or university are not eligible for COBRA and should look into purchasing a health insurance policy.

4. While more than half of the parents surveyed (55 percent) say they are very familiar with the rules and policies that affect how long their child is covered under their health insurance policy after college, many say they would have questions about obtaining health insurance for their college graduates in some common post-grad situations such as not receiving benefits from an employer (67 percent), or if their child were unemployed (66 percent) or going to graduate school (57 percent).

5. In order to help advise their children, parents must have the appropriate information - and, according to this survey, many parents feel like they are in the dark when it comes to their child's health benefits after graduation.

   Many parents (40 percent) feel that they do not have all the tools and resources they need to help their children make informed choices about health benefits after college. Almost all (95 percent) parents who don't have the tools and resources said that if they had this information they would play a more active role in this important decision.

Young Adults and Dependency Status

Some states have their own laws defining up to what age young adults can be considered dependents of health insurance beneficiaries. Find out what the age limit is in your state so that you can be prepared. Don't forget that these are the maximum ages for coverage in each state, and are based on different factors, such as whether the person is still in school, married or living at home. For example, the age cap in your state may be lower if you are married or do not live in your parents' home.

These age caps may be different under individual policies.

Source: Kaiser Family Foundation, statehealthfacts.org, Definition of Dependency by Age, 2007.

What is this?

Related Stories:

How Much are Your Benefits Worth?

Switching Jobs: Picking the Best Offer — Tips You Can Use

After a Layoff: Critical Health Benefits and Financial Decisions

Ranking Your Health Care Benefits Priorities

Making the Most of the Interview Process