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Editor’s note: To help you make the transition from the working world to graduate business school, Bloomberg Businessweek is launching a new series about how to prepare for an MBA program. The series—this is the fourth installment—will provide tips from experts and business school insiders, including administrators, students, and alumni, about how to do everything from making ends meet without a salary to setting career goals for securing your dream job after graduation.
As the summer winds down, incoming MBA students will realize that life as they know it is about to change. Most of the people who have signed on for full-time MBA programs at top business schools have to get used to the idea that they will soon leave behind careers and homes to move to new places and transform themselves back into students. Late August is when reality starts to set in. They will have to tend to things they might have been putting off, such as choosing health insurance (now that employers won’t be footing the bill), packing for the move, and tying up loose ends at work. Here is a rundown of tasks that incoming students need to accomplish before settling into their new life:
Insure your health. Health insurance is a high-priced necessity that some students would rather just ignore. Some business schools do not give students this option, which means incoming MBA students must do a little research before getting to campus.
The first step should be to determine the school’s policy. For example, at Michigan State University’s Broad Graduate School of Management, international students are required to get health insurance. They can find private insurance on their own or sign up for the university-sponsored plan; domestic students can enlist, too, even though they are not required to have insurance.
Even when business schools do not mandate that students have health insurance, most strongly encourage it. Many schools offer plans through the university. And some MBA students might be able to score low-cost policies through college alumni associations. To weigh all their options, incoming students should also look into what’s available outside of school, says Carrie McLean, a consumer specialist with EHealthInsurance.com, which is based in Sacramento, Calif. At 26—the age most students enroll in MBA programs—remaining on a parent’s plan is no longer an option, McLean says.
In addition, she adds, until 2014 insurance companies can deny coverage for preexisting conditions. In such instances, McLean suggests checking with the university’s health insurance plans because many cannot deny coverage for students, although they might charge more for it. As students research their options, they should look into the restrictions in their new state of residence. Before agreeing to any health insurance options, says McLean, students should determine how much they will use the insurance and what they can afford to pay. Then they should match budgets with policy prices and benefits. Finally, she suggests finding out exactly what their responsibilities are by asking such questions as “when must I pay the deductible?” or “when can you see the doctor and when do you need to pay a co-pay?” Online tools for comparison shopping are available at EHealthInsurance.com and elsewhere.
Before signing up for a policy, students should read the fine print, says McLean. “Students should ask the school for specific requirements,” she adds. “Some schools, for example, require mental health coverage, which is not covered by all plans.” Knowing exactly what they need upfront, and what individual plans offer, can help students avoid problems down the road.
Pack up and move out. Before students organize their stuff for the move, they must figure out what to do with their current residence for the next two years. Owners will have to choose between renting a property out and selling it, while renters will have to break their lease or sublet the place. In either of the latter cases, they will have to work out details with the landlord prior to moving out. If students choose to sublet an apartment, they should carefully choose the temporary resident. Check on references, personal credit, and his or her ability to pay rent in a timely fashion.
