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Student Health and Accident Insurance Can Fill the Coverage Gap

WebMD Feature

For parents, a new school year typically brings a flood of paperwork: school policies to read up on, the events calendar to keep in mind and emergency contact information sheets to fill out. But in that deluge may be another bit of paperwork worth perusing -- a brochure that offers student accident or health insurance. Overlook it, and you may not have a chance to buy coverage again until the next semester or even the next school year.

Student health and accident plans vary from state to state and plan to plan, but they all serve the same purpose.

"This (type of) coverage is designed to fill the gaps in the parents' primary insurance," says Glen Doering, assistant vice president of the special risk department for Guarantee Trust Life Insurance Company in Glenview, IL, which offers such policies.

Typically, these supplemental plans are purchased by parents who have traditional, fee-for-service health insurance, Doering and others say, but some subscribers of managed-care plans also buy the policies. Of course, such plans can also provide bare-bones protection for children whose parents are without health insurance. Most companies do not require a medical exam but ask students or parents to complete an enrollment form.

Here are the most common options sold to parents, and their typical cost and coverage information.

  • Accident insurance for kindergarten through 12th-grade students:

Accident-only plans typically offer school-hours coverage or, for a higher premium, 24-hour coverage. For instance, Guarantee Trust Life offers a school-hours accident plan for about $8 to $15 per year, with a maximum yearly benefit of $25,000 or $50,000. For 24-hour accident coverage, the cost goes up to about $30 to $50 per year. Again, the maximum benefit ranges from $25,000 to $50,000 per year.

The exact maximum benefit depends on coverage decisions made by the individual school. While the plans may appear to be individual, they are not, Doering says. "We issue the policy to the school, and the school is the policyholder." As such, the school stipulates coverage.

  • Accident and sickness insurance for kindergarten through 12th-grade students:

This option adds health coverage. For example, a plan offered by Commercial Travelers Mutual Insurance Company, in Utica, N.Y., costs about $400 per year, says Duncan McCully, the company's vice president of special risk. It covers a student 24 hours a day for health and accident needs such as hospitalization, doctors'-office visits and some prescription costs. Maximum coverage is $25,000 per year or more, depending on the plan.

  • Health plans for college students:

College health plans, which typically cover both accidents and illness, are very customized, says McCully. A school asks a company to write a plan with specific coverage. A typical plan, he says, often covers 80 percent of usual and customary fees, up to a maximum of $25,000.

"These plans are generally good for students who have come off their parents' plan," says McCully. The cost is about $400 or $500 per year. Plans with a much lower premium probably cover accidents only.

Selection Criteria

Before selecting a plan, do your homework:

  • Find out if the insurance company is licensed in your state. Know the name of the underwriter and call your State Department of Insurance or visit its Web site.
  • Look up the rating of the company. You can do this online at www.ambest.com (each rating report costs $4.95, payable by credit card). Or try your public library's reference department for Best's Insurance Reports or Standard & Poor's Insurance Company Ratings Guide. You can call Standard & Poor's at (212) 438-2400 and ask for the ratings of up to five companies.

"Look for at least an A rating," suggests John Dietrick, CEO of Monarch Management Corporation, Topeka, Kan., which offers student policies. (A++ is tops.)

  • Find out what's covered and what's not. If a plan duplicates too much of the coverage provided by your primary plan, it's probably not a good deal. And don't assume everything will be covered, says Dietrick. If medical records submitted with a claim show that it's related to a pre-existing condition, it may not be paid, he says.

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Last Editorial Review: 1/30/2005 10:44:35 PM