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5/9/2002

Know Your Temporary Medical Insurance Options

Kate Traynor

Maintaining health insurance coverage is a critical issue faced by students who lose their eligibility for protection under their parents' policy or whose coverage ends after graduation.

Insurance companies typically drop full-time students from their parents' health insurance policy by age 23. Even students who maintain their insurance throughout school can face a lapse in coverage if they are not employed immediately after graduation. Also at risk for an insurance-coverage lapse are newly hired pharmacists whose employer-sponsored health insurance benefits do not begin the first day on the job.

But with a little planning—and enough money—it is possible to prevent a lapse in health insurance coverage.

COBRA health benefits. Students who lose health insurance eligibility under their parents' group health plan may qualify for up to 36 months of coverage from that health plan, thanks to the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Although COBRA requires that the health plan offer the student the same level of benefits that had been available under the parent's plan, the student must pay for the coverage. The student pays the entire insurance premium, including costs that the parent's employer previously paid and up to 2 percent extra for administrative costs.

People who are eligible for COBRA coverage have 60 days to accept the insurance, measured from either the date that initial coverage was lost or the date the beneficiary was sent a notice about COBRA eligibility, whichever is later. Students who are considering COBRA coverage should contact their health plan about the requirements before the existing policy's protection expires.

A fact sheet on COBRA coverage is available from the Department of Labor.

Short-term insurance. Healthy young people who balk at the thought of paying COBRA insurance premiums may want to consider taking out a short-term or interim health insurance policy. This type of policy is designed to cover the costs of an unexpected illness or injury in an otherwise healthy person.

Short-term medical insurance, which is typically available for one to six months, can fill a coverage gap between the start of a job and the date on which the worker qualifies for an employer-sponsored insurance plan. Some plans allow a person to reapply for additional months of coverage after the initial policy ends.

But the short-term plans exclude people with preexisting health conditions as well as persons who engage in sports and other activities that put them at risk for injury. Pregnant women are not eligible for short-term insurance, and routine maternity benefits are not covered for women who become pregnant after they purchase the insurance. Finally, people who incur a claim while insured under a short-term policy are not eligible to renew it.

Additional information about temporary medical insurance is available from Fortis Inc., the nation's largest provider of interim medical insurance.

School and residency health plans. Some pharmacy schools offer students medical insurance through a student health plan, which may cost less than a COBRA-related or short-term insurance plan. Students who are considering residency training may be able to join a program that offers medical insurance coverage.

Professional associations. Group health insurance is available to members of certain professional associations, including ASHP, and is also offered by some alumni associations. Health plans sponsored by associations vary in length and terms; contact the association for information about eligibility.