Do you have students who enroll in their insurance plan but stop coverage over the summer or re-enroll in a new plan each semester? Alternatively, do you have students who keep their insurance plan active year after year? The way you and your students manage their insurance can impact their coverage and how existing conditions they have may be covered.
Extensions, renewals or enrolling in a new policy may at first glance seem like interchangeable insurance jargon, but they are not. It is important to understand the differences and what impact they may have on your students’ coverage. In today’s blog, we will demystify these terms to help you better understand their insurance plan and how to best administer it.
To begin our discussion, we will first look at the three terms and what they mean:
When a student extends their insurance plan, it means they are adding more time to the end of their policy. Typically, the policy number stays the same but the end date will change to a later point in time. In cases like these, students may have to pay a nominal administrative fee to extend their plan in addition to the cost for the additional coverage.
Similar to extending a policy, a renewal will also add more time to the end of the policy and will typically keep the same policy number. What makes the renewal distinct from extensions is that you are finishing a certificate period year and starting a new one. That means that some benefits that say “per certificate period year” will start over in their benefits. An example would be if you had an insurance plan that had $500,000 coverage per certificate period year. When you renew the plan, the $500,000 limit will start over. If you are extending an existing plan, you would continue to have the same $500,000 coverage minus any payment in claims.
While this isn’t an official insurance term, it’s important to clarify that a new policy is when a student enrolls in a new plan by completing a new application. Generally, a new policy number is given and a new ID card is issued.
Now that we understand what all three terms mean, the next step is to understand what the benefits are on their international student insurance plan, particularly how pre-existing conditions are handled.
A pre-existing condition is essentially any condition that has happened before the start of the insurance plan. There is typically a look back period and international student insurance plans may have a waiting period before pre-existing conditions are covered such as a 12 or six months. There are some plans that may not cover pre-existing conditions at all, others that may limit the coverage for pre-existing conditions, or still others that may cover pre-existing conditions from day one. So what makes a covered condition different from a pre-existing condition? As long as the condition is covered on the plan, the difference will be when the accident happened and the dates of coverage of the plan.
For simplicity purposes, let’s take these examples:
Example 1. A student has coverage from August – December and they break their leg in September. This condition would be considered an eligible medical expense and would be covered.
Example 2. A student has coverage from August – December and they break their leg in July. This condition would be considered a pre-existing condition since the accident happened before the plan started.
Using these same rules of thumb, this can be used to show what happens if a student buys a new plan versus extending/renewing a new policy. Let’s take Example 1 where a student has a plan from August – December and they break their leg in September, the medical expenses would be covered the same as any other illness/injury until the end of the policy in December. Now, let’s say the student extends coverage through until next August. Any medical expenses for this injury would continue to be covered since it’s the same plan. If they plan to study another year and they renew their plan, their leg would continue to be covered because, again, it’s the same plan.
However, let’s take the same Example 1. The student has a plan from August – December and they break their leg in September, the medical expenses would be covered the same as any other illness/injury until the end of the policy in December. Let’s say the student decides to buy a new plan that starts in January and goes until August. In a case like this, the student would have completed a new application, been issued a new ID card with a new policy number. If the student had ongoing medical treatment for the broken leg on the new plan in February, this broken leg would now be considered a pre-existing condition and may not be covered or may be subject to a waiting period.
So if that’s the case, why wouldn’t a student always extend or renew their plan? There are a few reasons for this:
- Breaks – in some cases, students may not want to pay for coverage during winter break or summer break, so they will stop coverage so that they do not have to pay for insurance during those breaks.
- Administrative Fees – sometimes there is a small fee the student must pay each time they extend or renew, so they may choose to enroll in a new plan to avoid those fees (those fees are often $5 but depends on the carrier).
- Renewal Premium – rates will often increase year to year when a student renews the same plan so it might be more affordable to buy a new plan rather than keeping their existing plan active.
- Convenience – sometimes it’s just easier to go through the application than to log into their account to extend coverage.
No matter the reason, it’s important to understand the coverage of your student’s policy, how to administer it, and what the implications are. Each insurance plan is different so it’s important to contact the insurance company to be sure you and your students understand how this all works to avoid any unnecessary surprises and expenses.
If you have questions or need help, please contact our insurance team at email@example.com.