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Why Your Teen (and You) Need to Know About Insurance

Both you and your teen need to know some important things about insurance before that teen heads off to university! Usually, as our kids get ready to go off to college, we spend time helping our kids shop, get organized, pack, get their schedules set up, etc.

But, I want to encourage you to consider potential insurance issues for your child. Your kids will get sick while at school, someone may crash into their car, or their computer may get stolen or damaged. How will they (and you) deal with those issues? Will your current policies help you at all? Do you know?

Please, take a few minutes to learn about three kinds of insurance and how those policies can help you and your college students.

Health Insurance

We buy (or receive from our jobs) health insurance to help pay for costly medical expenses. However, we still seem to spend far more than we prefer on medical costs for ourselves and our families. Why is that? Sorry, there is no short answer! But if we understand the concept of health insurance and how it works, we can use it to our advantage.

Why Your Teen Needs Health Insurance

Why does your teen need health insurance? Because they do stupid things without thinking them through! How do I know that? Not sure you want to know! Let’s say I have had teens. How they survived some of their stupidity was only an act of God!

Colleges and universities are harbingers of germs and viruses. Kids live, study, eat, and work in close quarters where germs can quickly spread. Most college-aged kids are not models of cleanliness and neatness, which further adds to the easy spread of diseases. Count on it; your kids will get sick at school. It might be just a cold they get or the stomach flu, or it could be something more serious.

The overall lifestyle of college students does not promote good health. Late night study sessions, cafeteria food, parties, snacking – none scream “good health and nutrition!” All those poor eating choices and lost sleep opportunities increase their chances of getting sick.

While many of those illnesses are minor, anything that leads to urgent care appointments, ER visits, prescriptions, or lab work can quickly get expensive. Insurance can help lessen the financial impact of illness or injury.

Are Your Teens Covered Under Your Health Insurance Policy, or Do They Need Their Own Policy?

So how do you know if your teens are covered under your family health insurance policy? Read the fine print! Study all the details of your policy. It should give you all the information you need to know. If not, call the insurance company and ask! Considering those details could save you money, time, and difficulties later!

Is your teen going to school out of state? Does your insurance company offer benefits at any locations where your teen will be studying? Many policies will only provide out-of-state benefits for emergency room visits for true emergencies. Too often, if a hospital admission after the ER visit is required, those charges will either not be covered or covered at a substantially lower amount. Read your policy to determine if your teen will have coverage when out of state. Most policies offer a provider search option through their websites. Use the search to look for covered providers in your child’s school area. (Hint: Even though Medicaid is a federal program administered by individual states. Most states do not have reciprocal agreements. Only in-state facilities will offer treatment coverage if your child is on a Medicaid program.)

What If My Policy Does Not Cover My Teen at College?

If your policy does not cover your teen out of state, don’t panic; you have options!

  • Pay healthcare bills yourself. (Some providers will offer a discount if you are a self-pay patient; be sure to ask!)
  • Change your health insurance policy to one that offers a nationwide provider option. Note: You may not be able to do that immediately; you may need to wait until specified renewal dates. (Warning! These are much more expensive!)
  • Colleges and universities often offer some form of medical coverage for their students. Look into that.
  • If your student is over 18, they may be able to purchase their own policy in the state where they attend university. (A medical needs sharing program could work for this as well.)

Basic Health Insurance Terms and Definitions

Understanding how insurance works, or at least the basics of it, depends on understanding the terms and abbreviations used by insurance companies. Here are some basic terms you need to know.

  • Policy – This is the set of agreements between you, the insurance company, and healthcare providers that lay out the framework for what is paid by the insurance company, what you must pay, and what the provider can charge.
  • Premium – the amount you pay monthly to the insurance company to access its coverage, benefits, and agreements.
  • Deductible – How much you must pay upfront before the insurance begins to pay for your healthcare.
  • Out-of-Pocket Expenses – The total amount you will pay annually for healthcare before the insurance company covers expenses completely (for covered expenses).
  • Copay – Expressed in dollars or percentages, what portion of the expenses you must pay for services before reaching your annual out-of-pocket maximum. Your copay could be $15 for a primary care office visit or 30% of lab charges. What does that mean? When you visit your doctor, you will pay $15, and the insurance company covers the rest of the bill. Or, you will pay 30% of the lab charges, and the insurance company will cover the rest. Of course, you may need to meet your deductible before some benefits kick in.
  • In-Network Providers – A group of healthcare providers who have agreed to accept negotiated payment rates from insurance companies.
  • Out-of-Network Providers – These are healthcare providers who have not made agreements with your health insurance company. Amounts paid by your insurance company to these providers will be either less or none, which means you are responsible for paying higher costs.
  • Covered Services – The treatments, medications, and procedures your health insurance company will pay for. Most policies will not cover experimental treatments, “vanity” cosmetic surgery, or non-FDA-approved drugs.

How Does Your Student Use Health Insurance?

  • Insurance Card – Be sure your student has a current copy of an insurance card from your health insurance company.
  • Healthcare Providers – Seek out approved or in-network providers near the school: hospital, urgent care, pharmacy, doctors, physical therapists, etc.
  • Take Precautions – Encourage your student to make wise choices about his lifestyle at college. Getting enough sleep, being physically active, making conscious decisions about what he eats, and keeping his space clean will help prevent many illnesses and injuries common to college students.

Be proactive when it comes to healthcare spending. Understand your insurance policy, where you can use your benefits, what it will or will not cover, and your financial responsibilities.

Auto Insurance

Will your teen have a car at college? Will he drive other people’s cars? Better check out your auto insurance policy details. Is he covered on your policy, or does he have his own insurance? Does the auto insurance policy allow him to loan his car to friends? It’s wise to go over all this with your child before he heads off to school. Get it all figured out in advance!

Auto Insurance Requirements Vary from State to State.

Check the laws for the state where your teen will be going to school. Does your (or his) auto insurance policy meet the requirements for that state?

Keep Premiums Paid and Cards Up to Date

Be sure auto insurance premiums are paid on time and are always up to date. And keep a printed copy of the insurance card and info in the car. Also, be sure the card in the vehicle is current. Cards via the insurance company app also work as long as your teen knows any needed password for the app!

What To Do In a Traffic Incident

Does your teen know what to do or how to respond in case of an accident or incident? It’s always wise to go over that with younger drivers. Too often, as parents, we assume our teens know what to do. Never assume anything with teens! You know they don’t always pay attention to you, right? Establish a procedure or process for them to follow in case of an accident. Print it out and put it in the car if you need to! Just provide a basic list to follow, like this:

  • Never admit fault.
  • Call police.
  • Call mom (or dad).
  • Exchange insurance information.
  • Contact insurance company.

Homeowner/Renter Insurance

One final insurance aspect to consider: What about all their stuff? Yes, I know that most college students do not take many valuable things with them to school, but there are all those electronic items. That expensive laptop they just bought, or the costly gaming system they insist on taking along. Or, if you have kids who are musicians, what about that violin or French horn? What if something happens to those?

How does your homeowner or rental insurance work with valuable items taken off to university?

Read your policy and find out! Or call your insurance agent and ask! Do you need to add a special rider to cover those items, or will your current coverage be enough? Computers do get stolen; instruments can get damaged. We’ve had it happen to us; it can happen to you also.

What if your teen rents an apartment?

Does he need his own renter’s insurance policy? Look into it now so you won’t be caught off-guard later. Always be prepared, or something like that. Expect things to go wrong; you can be pleasantly surprised when they don’t. Just be an informed parent.

Let’s face it – sending kids to university is not for the faint-hearted. Long-distance parenting is stressful! So, be proactive and prepared. Getting kids ready to leave home often means more than just shopping and packing. Put in the extra effort to help them have a great experience as they head off to school. You will all be thankful!

Did you miss the first post in this series about getting your teen ready for college? Check it out: Does Your Teen Know How to Manage Money?

Carol Rhine Rhine Home School Services

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