If your child is heading to college soon, you have probably already wrestled with tuition, room and board, and meal plans. But there is another cost that catches many families off guard: health insurance. Most colleges require students to have health coverage, and many automatically enroll them in a campus-sponsored plan that can add $2,000 to $4,000 per year to your bill. The good news is that you may not need to pay for it. If your family already has a solid health plan, you can often waive the school's insurance and save thousands. This article walks you through how college health insurance works, when it makes sense to waive it, how to stay on a parent's plan, and what to watch for so your student stays covered without overpaying.
How College Health Insurance Works
Most four-year colleges and universities require proof of health insurance as a condition of enrollment. According to the American College Health Association, about 75% of schools with on-campus housing mandate that students carry some form of health coverage. If you do not show proof of existing insurance before the deadline, the school will automatically enroll your student in its Student Health Insurance Plan (SHIP) and charge you for it.
These campus plans are group policies negotiated between the school and a health insurance company. They are designed to work well with on-campus health centers and local providers near the school. For the 2025-26 academic year, annual premiums for SHIPs at public universities typically range from $1,500 to $3,500, while private universities can charge $3,000 to $5,000 or more. At some schools, the premium shows up on the tuition bill as a separate line item, and at others it is bundled in with fees.
What SHIPs Usually Cover
Most student health insurance plans include:
- Visits to the campus health center, often at low or no cost
- Hospitalization and emergency room visits
- Mental health services, including counseling sessions
- Prescription drugs
- Preventive care such as flu shots and annual checkups
- Lab work and diagnostic imaging
Coverage varies by school. Some SHIPs are quite generous, with low deductibles and broad networks. Others are bare-bones. Before you decide whether to keep or waive the campus plan, read the summary of benefits carefully.
When You Can Stay on a Parent's Plan
The Affordable Care Act (ACA) allows young adults to stay on a parent's health insurance plan until they turn 26. This applies whether the student is in school or not, married or single, living at home or across the country. It does not matter if the school is in a different state from where your family lives.
This single provision saves American families billions of dollars each year. A Commonwealth Fund analysis found that the share of uninsured young adults ages 19-25 dropped from 34% to about 14% after this rule took effect. For college students, it means you almost always have the option to keep your child on your existing family plan instead of paying for a campus policy.
Does Your Plan Work Out of State?
This is the most important question to answer. If your student is attending school in the same state where your family lives, your current plan will likely work just fine. But if your child is going to college in another state, you need to check a few things:
- HMO plans often restrict coverage to a specific network of doctors and hospitals in a defined geographic area. If your student is hundreds of miles away, the nearest in-network provider might be back home. Out-of-network care can be extremely expensive, sometimes leaving you responsible for 40% to 60% of the bill.
- PPO plans are generally more flexible. They allow out-of-network visits, though you will pay more than you would for in-network care. If your family has a PPO, your student can probably see doctors near campus without major problems.
- High-deductible health plans (HDHPs) paired with a Health Savings Account (HSA) can work well for healthy young adults, but make sure your student understands they will pay out of pocket until the deductible is met. For 2025, the IRS sets the minimum deductible for an HDHP at $1,650 for an individual.
Call your insurance company and ask specifically: "Will my child have access to in-network providers near [school location]?" Get the answer in writing if you can.
When to Waive Campus Insurance
Waiving the SHIP makes financial sense when your existing family plan provides solid coverage in the area where your student will be living. Here is a general checklist:
- Your plan has in-network doctors, urgent care clinics, and hospitals near campus
- The plan covers mental health services (this is critical -- according to the Healthy Minds Study, more than 40% of college students reported symptoms of depression or anxiety in the 2023-24 academic year)
- Your plan's prescription drug coverage is adequate for any medications your student takes
- Out-of-pocket maximums and deductibles are manageable for your family's budget
- Your plan covers emergency care nationwide (most do, by federal law)
If all of those boxes are checked, you can likely save $2,000 to $4,000 per year by waiving the campus plan. Over four years, that is $8,000 to $16,000 -- real money that could go toward tuition, textbooks, or reducing student loan borrowing.
According to Sallie Mae's "How America Pays for College" report, the average family spent $28,026 on college costs in the 2024-25 academic year. Cutting an unnecessary insurance premium is one of the simplest ways to trim that number.
When to Keep the Campus Plan
Sometimes the school's SHIP is actually the better deal. Consider keeping it if:
- Your family does not currently have health insurance, or your plan has significant gaps
- Your family plan is an HMO with no in-network providers near the school
- Your student has a chronic condition that requires frequent specialist visits, and the campus plan has a stronger local network
- The campus plan includes free or low-cost visits to the campus health center, which is more convenient for a busy student than finding off-campus providers
- Your student is over 26 and no longer eligible to stay on your plan
Also consider the "convenience factor." Campus health centers are often located a short walk from dorms and classes. Students can pop in between lectures for a sore throat or a flu shot. If your family plan requires finding an off-campus doctor, your student may put off getting care.
How to Waive Campus Insurance: Step by Step
The waiver process varies by school, but the general steps are similar.
Step 1: Find the Deadline
Schools set a waiver deadline, usually in the summer before classes start. Miss it, and you will be automatically enrolled and charged. Check your enrollment portal or the student health services website. Some schools set the deadline as early as July; others give you until September.
Step 2: Gather Your Insurance Information
You will need:
- Insurance company name
- Policy or group number
- Member ID for your student
- The policyholder's name (usually a parent)
- Customer service phone number for the insurer
Step 3: Complete the Online Waiver Form
Most schools use an online portal for insurance waivers. You will enter your existing plan details and confirm that your coverage meets the school's minimum requirements. Some schools require the student to complete this form, not the parent.
Step 4: Confirm the Waiver Was Accepted
After submitting, check your student's account to make sure the SHIP charge has been removed from the bill. If it has not been removed within a week or two, call the student health office.
Step 5: Repeat Every Year
At most schools, you must waive the SHIP each academic year. It is not a one-time process. Set a calendar reminder so you do not forget.
Challenges to Watch
Even when you plan carefully, a few things can trip you up.
Missing the waiver deadline. This is the most common problem. If you miss the deadline, most schools will not grant exceptions, and you will be stuck paying for a plan you do not need. Mark the date the moment you see it.
Aging out of a parent's plan mid-semester. If your student turns 26 during the school year, they will lose eligibility for your family plan. Most insurers drop coverage at the end of the birth month. Plan ahead by looking into the school's SHIP or a Marketplace plan at HealthCare.gov before the gap occurs.
Assuming all campus care is free. Even with a waived SHIP, students can use the campus health center for basic services. But lab work, imaging, prescriptions, and specialist referrals often get billed to your insurance. Make sure your student knows to present their insurance card at every visit.
Forgetting about mental health. College is stressful. The National Alliance on Mental Illness (NAMI) reports that 75% of all lifetime mental health conditions begin by age 24. Make sure whichever plan you choose covers therapy and psychiatric care. Many campus counseling centers offer a limited number of free sessions, but students who need ongoing care will need insurance to cover it.
Not understanding the network. A plan might technically "cover" out-of-network care, but the cost-sharing can be brutal. Always verify the network, not just the coverage terms.
A Quick Look at Costs
Here is a rough comparison to help you think through the numbers:
- Campus SHIP premium: $2,000 to $4,000 per year
- Adding a dependent to an employer plan: Varies widely; the average employee contribution for family coverage is about $6,575 per year, according to the KFF 2024 Employer Health Benefits Survey, but adding one child may cost less if you already have family coverage
- ACA Marketplace plan for a student: $200 to $400 per month depending on the state, age, and income; subsidies can lower this significantly
If your student is already on your family plan at no extra cost, waiving the SHIP is almost always the right call -- as long as the network works.
Frequently Asked Questions
Can my student use the campus health center if we waive the SHIP?
Yes, in most cases. Campus health centers typically serve all enrolled students regardless of insurance status. However, services beyond basic visits (lab tests, X-rays, prescriptions) may be billed to your insurance or charged out of pocket.
What if my employer plan does not meet the school's minimum requirements?
Some schools require plans to meet specific benchmarks, such as a maximum out-of-pocket limit or mental health parity. If your plan does not qualify, you may not be able to waive the SHIP. Check with the school's student health office.
Does Medicaid count for waiving the SHIP?
It depends on the state and the school. Some schools accept Medicaid; others do not, especially if the student is attending school in a state different from where their Medicaid coverage is based. Medicaid coverage can be limited or unavailable out of state.
My student is on CHIP. Does that work?
The Children's Health Insurance Program (CHIP) typically covers children up to age 19. If your student is older, they will age out. Check your state's CHIP rules at InsureKidsNow.gov.
Can my student get their own plan on the ACA Marketplace?
Yes. Students can enroll in a plan through HealthCare.gov or their state's marketplace during the annual Open Enrollment Period (November 1 through January 15 for the 2025-26 plan year). Losing campus insurance can also trigger a Special Enrollment Period.
The Bottom Line
Health insurance is one of those college costs that is easy to overlook until you get a surprise charge on your tuition bill. The key is to act early. Check your family's existing coverage, verify the network near campus, compare costs, and submit the waiver form before the deadline if your plan is strong enough. If it is not, the campus SHIP can be a good safety net, especially for students who need convenient access to local care.
Do not let this be an afterthought. A single ER visit can cost thousands of dollars without insurance, and mental health care is too important to leave uncovered. Whatever you decide, make sure your student has a plan in place before the first day of class.
Want help mapping out all of your college costs -- including insurance, tuition, aid, and loans -- in one place? Build your personalized plan at CollegeLens to see exactly what your family will pay and where you can save.
-- Sravani at CollegeLens