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Health insurance for young entrepreneurs
by Tony Novak, CPA, MBA, MT
, revised 11/21/2011
Each year a significant number of new college graduates decide to start their own business rather than join the corporate workforce. One of the big obstacles for these young entrepreneurs is covering the cost of health insurance after they can no longer be covered under a school health plan or their parent’s health insurance. But those students who plan ahead can save thousands of dollars over the coming years.
Student health plans that provide liberal benefits are available throughout most of the country for significantly less than a thousand dollars per year. Most people do not realize that once issued, this coverage may be retained permanently as a long-term portable health insurance plan for the rest of their working career. In contrast, comparable commercial health plans typically cost two to three thousand dollars per year, depending on your location.
The Affordable Care Act of 2010 extended parent’s coverage, on request, to children up to age 26. Now the first independent policy is typically needed at age 27.
The key to locking in these savings is simply to apply before graduation. Most of these plans are easily issued online. Any full time college or graduate student is eligible for this coverage, regardless of health history, with a home or school address outside of Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island or Vermont.
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