QUESTION: MY son is 22 years old. He is a college student in the US. Part of his tuition pays for the cost of health insurance. My family and I are eligible to join a health plan in my new job. Should I enroll him in this plan along with my wife and other two children who go to school here? Would I be doing anything wrong in covering him twice? He has two more years in school before he graduates.
-- K.C., Kingston 9.
ANSWER: Many persons believe there is a law against "double insurance." Strangely, what they call "double coverage" is not limited to insuring the same property twice. It is meant to include buying the same coverage from several insurers, not just two! There is no law against "double coverage." Consumers can have as many policies as they wish on the same object, with one important proviso. Each policy should pay a proportionate part of the loss in the event of a claim. The buyer should not collect more than 100 per cent of his loss. This rule, which is rooted firmly in law, applies to most types of insurance contracts.
Life insurance is an exception to the double insurance principle. This is based on a very solid argument: human life has no monetary limit. One can insure one's life (or the lives of close relatives) for as much as one can afford. Furthermore, coverage can be placed with several insurers. Each contract should pay independently of the other when the claim arises.
With the theory out of the way, let me try to answer your two questions. The US policy, I suspect (I have not seen it), will pay your son's health costs should he fall ill while attending school there. Medical care is not funded, with few exceptions, by either the state or federal governments. Such costs are borne by employers and employees. Secondly, the cost of health care is very high. While the rate of inflation in the US economy has been in single digits for many years, medical cost inflation has been running over 10 per cent for a very long time. These are two factors that cause most schools to insist that foreign students especially should have health insurance.
I do not know if your son's insurance covers him when he returns to Jamaica from time to time. What would surprise me was if it outlawed "double insurance." I feel reasonably sure that it does not.
I can write with far more assurance about what local contracts say since I have access to these policies. The first point is that they recognise that a person can access benefits under several health plans. The practice of "double insurance" is not frowned upon. Policies refer to it in a typically highfaluting way. It is called "Co-ordination of Benefits" or, "Non-duplication of benefits."
The condition explains what will happen when someone is covered more than once for the same benefit. The principle is that when there is "double insurance," the policy benefits will be reduced. The intention is that the insured does get more than 100 per cent under all the policies.
Enroll all members of your family in the local health plan. Use it only when your son comes home from time to time. The other one should be used while he is living in the US. Bear in mind that you may need a letter from his school to confirm that he is a full time student. Local policies for some reason, generally exclude children if they are over 18 and not attending school.
Cedric E. Stephens provides advice on risks and insurance. If you need free information or advice, write to the Financial Editor or contact Mr. Stephens directly at aegis@cwjamaica.com
