Federal Government Could Exempt Some College Student Health Plans

Inside Higher Education is reporting of an unexpected proposal by the Department of Health and Human Services that will allow student health plans self-funded by colleges to qualify as “minimum essential coverage” under the Affordable Care Act’s (ACA) requirement that individual Americans must participate in a qualified health plan. The proposed regulation would exempt such plans from the requirements imposed on other student health plans. The proposal would affect only about 30 private and public research universities that self-fund their student health insurance plans.

The article by Doug Lederman, points out that some consumer advocates are concerned that additional institutions may seek to self-fund their plans as a way to avoid new requirements.

“Without federal protections and only minimal state oversight, self-funded plans are free to discriminate based on preexisting conditions, offer limited coverage with low annual limits on benefits, and commit a number of consumer abuses that the ACA was designed to eliminate,” said a health care advocacy group report issued last summer.

Observers, however, don’t feel that’s very likely.

“If a university is currently buying or contributing to a student insurance plan, they might decide to self-fund,” said Matt Bowman, senior legal counsel with Alliance Defending Freedom. “A lot of schools don’t feel the need to fund a student plan.”

In fact, some schools, such as Franciscan University of Steubenville, in response to the ACA and HHS’ contraceptive mandate, decided to drop its requirement that students purchase insurance coverage.

“In mid-April, Franciscan sent a letter to parents and students, informing them that with the threat of the HHS mandate looming and the immediate cost to students rising rapidly, it would no longer require students to have health insurance,” a May 23 Franciscan University of Steubenville statement said. “Because of that, the letter went on to explain, it would also no longer be able to offer students the option of purchasing health insurance through the University.”

According to the Inside Higher Education article, the federal government’s proposal would affect many of the Ivy League institutions and the University of California system which operate self-funded student health plans.