Health Insurance Coverage Options for College Students

College students in California need health coverage to enroll at some institutions and avoid the ACA’s individual mandate penalty. Learn more in this article.

When students embark on their own to attend college, they need a lot of things: dorm room supplies, a laptop, textbooks, and more. What they may not think of is health insurance.

Some California colleges and universities require enrolled students to have health insurance coverage. Unless they qualify for an exemption, college students will also need to make sure they have qualifying health coverage to avoid the individual mandate penalty in order to comply with the Affordable Care Act (ACA).

Keep reading for some common health insurance coverage options for college students.

School-Sponsored Health Plan

A school-sponsored health plan is a health insurance policy that colleges and universities offer to enrolled students. These plans meet the ACA’s minimum requirements for health coverage, meaning that if a student purchases coverage through a school-sponsored health plan, they will not have to pay a tax penalty.

School-sponsored health plans can be self-insured or fully insured. If the plan is self-insured it may not be required to cover the 10 essential health benefits (as mandated by the ACA), and they tend to not be as robust as fully-insured plans. A fully insured plan is a policy that a college or university purchases from a private health insurance company, and it would be required to cover the 10 essential health benefits.

A college- or university-sponsored health plan would be good for someone who doesn’t travel very much and can get the care and services they need on campus or close to campus.

Some concerns with school-sponsored health plans include:

  • Limited access to off-campus medical care
  • Lapses in coverage if the status of the student changes (going full-time to part-time, for example)
  • Traveling outside of the state and not having coverage.

A school-sponsored plan may also require students to pay a large up-front sum for their insurance. When considering this option, students should be sure to carefully review the costs and access to care.

Student Health Plans

In some instances, individuals can get a student health plan from a private insurer or other organization. Typically, student health plans are available to full-time students who are between 17 and 29 years old and attending an accredited school.

The benefits of a student health plan include:

  • Students have coverage year-round, not just while school is in session.
  • Students have coverage wherever they go.
  • Students usually have more options to choose from when they need medical care.
  • Students can typically keep the same plan if they transfer to a different school with no lapse in coverage.

On the downside, student health plans can be costly and may require students to pay a large lump-sum up front. Students who are considering these plans should be sure to shop around to make sure they are getting the best deal.

Covered California

If a school-sponsored health plan or student health plan doesn’t fit the needs of the individual, a student can instead purchase a policy through Covered California. Depending on the student’s income level, he or she may be eligible to for tax credits to help them purchase a private health insurance plan through Covered California. He or she may also qualify to purchase health coverage through Medi-Cal at a reduced cost or no cost at all.

Note that if a student enrolls in a school-sponsored plan or a student health plan, he or she cannot receive tax credits through Covered California. A student should carefully consider if the clinics, doctors, and services they need will be easily accessible when choosing a plan from Covered California.

Dependent Health Plan

One of the cornerstones of the ACA is that children can stay on a parent’s health plan until they turn 26 and as long as they are a tax dependent, even if the student can purchase insurance through their university.

When considering this option, parents and students should carefully consider the coverage options where the student will be attending school. If the student chooses to go to college or university in a different region or state, access to covered medical care may not be as robust or readily available if they remain on a parent’s plan.

Important questions to consider include:

  • Does the student have coverage where their school is located?
  • Are there sufficient options for in-network doctors, emergency rooms, and other medical services near the school?
  • Is it cost effective to pay out-of-network costs as opposed to purchasing a different policy?