Comment on Student Health Plans

GSU has sent an official comment to the Secretary of the United States Department of Health and Human Services regarding student health care plans. If you’d like, you can download it as a PDF or read it below.

Dear Secretary Sebelius,

As campus groups advocating for improvements in labor and research conditions for graduate students, we welcome the opportunity to comment on the Proposed Rule indicating that self-funded student health plans (SHPs) will meet the Affordable Care Act’s (ACA) minimum essential coverage requirement. Access to high-quality, affordable medical care is central to the health and financial wellbeing of all students. We are grateful for the attention paid to student issues in this and other ACA regulations.

We have two concerns about the designation of self-funded SHPs as minimum essential coverage:

  1. The unregulated status of these plans may leave students unable to benefit from ACA patient protection provisions.
  2. Students who are offered a self-funded plan through their college or university may find it difficult or impossible to obtain coverage through the Exchanges and to access the ACA premium and cost-sharing tax subsidies.

We worry that if self-funded SHPs are considered minimum essential coverage, many students will effectively be excluded from receiving any benefits under the ACA. This concern applies not only to those students presently enrolled in self-funded SHPs, but also to those enrolled in fully-insured SHPs. We believe the exemption from ACA regulation for self-funded SHPs creates a strong incentive for colleges and universities with fully-insured plans to self-fund in order to reduce the costs of providing a SHP that is still considered minimum essential coverage. In order to assure access to ACA protections for all students, we recommend that the final regulations permit students at any college or university—including those with self-funded coverage—to purchase insurance through the Exchanges with the aid of ACA tax credits. We also respectfully request that you share our comments on this issue with appropriate colleagues at the Department of Treasury as they review their own regulations about the ACA Exchanges and tax subsidies.

Self-funded plans can provide sub-standard coverage

Self-funded SHPs are possible only because they serve a largely young and healthy population. In the case of students who have chronic and/or severe medical conditions, such plans’ coverage can fail to meet key patient protection standards of the ACA. Recent reports about self-funded SHPs’ various caps—on prescription drug and annual or lifetime benefits, for example—indicate that such plans can leave students exposed to financially debilitating co-pays or complete loss of insurance. [See SFGate, CNN.] Ideally, such SHPs would be required by Health and Human Services (HHS) to meet the patient protection standards of the ACA. We recognize, however, that because self-funded SHPs are designated neither as group nor as individual insurance under the law, such plans may be beyond the purview of HHS’s regulatory authority. But we are concerned that this exemption will leave many students without a clear path for accessing quality plans at affordable prices, as mandated by the ACA. For these reasons, we urge HHS to permit students at any college or university, whether fully-insured or self-funded, to acquire health coverage through the Exchanges.

Affordability and access to the Exchanges

Since many graduate students, and many undergraduates as well, work full-time to fund their educations, often at low income levels, they represent a population in a precarious financial situation: precisely the group the ACA’s subsidy provisions are meant to assist in securing affordable, quality health care coverage. Graduate students who work as instructors, teaching assistants, or in other campus jobs typically earn between 150-250% of the federal poverty line for individuals. In almost any other employment sector, individuals with such an income level would be eligible for the benefits of the subsidies available for coverage purchased through the Exchanges. In the current insurance climate, however, these students generally have no option but to pay well in excess of 9.5% of their income—designated in the ACA as the maximum threshold of affordability—for the plans offered through their colleges or universities.

An earlier ruling (CMS-2011-0016-0001) designated fully-funded SHPs as individual plans for the purposes of the ACA. We fully support this regulation and echo the comment letter pertaining to it submitted by Campus Progress, et al. requesting that students be permitted to seek coverage through the Exchanges with the aid of tax credit provisions. We would also like to point to the letters submitted by the University of California and the American Council on Education as evidence of general recognition among colleges and universities that students should be eligible for Exchange subsidies. It remains unclear, however, how self-funded plans will interact with the Exchanges and tax subsidies, and we ask that HHS address this issue before finalizing its regulations.

The central point which needs to be clarified, in our view, is whether an offer of a self-funded SHP constitutes a bar to accessing the Exchanges and the tax credits. We ask that HHS and Treasury revise the Proposed Rule such that self-funded SHPs do not qualify as minimum essential coverage for the purposes of Exchange eligibility (whether offered to student- employees, such as teachers and faculty assistants at some public universities, or to non- employed students).

A second point on which we ask for clarification relates to the internal rules of colleges and universities. Even if HHS and Treasury were to rule that self-funded SHPs do not count as minimum essential coverage, some colleges and universities could issue policies which prevent their students from taking advantage of Exchange and subsidy provisions. The Harvard University Student Health Plan (HUSHP) is instructive in this regard. Harvard does not consider insurance obtained through the Massachusetts Health Safety Net—an already operating, state- legislated exchange and subsidy program—or through Commonwealth Care—the Massachusetts insurance programs for low-income individuals—sufficient to waive enrollment in HUSHP. This leaves Harvard students, regardless of income level or employment status, unable to benefit from exchange and subsidy provisions offered in Massachusetts.

Colleges and universities with self-funded SHPs thus could, we believe, assert a right to determine what counts as adequate health insurance for their students, and thereby circumvent the ACA. We urge HHS to instruct colleges and universities that they may not enact policies that categorically deny their students the option of purchasing insurance through the Exchanges and to direct universities to accept Exchange-based coverage as a substitute for self-funded SHPs.

An earlier comment letter submitted by Harvard University (in regard to CMS-2011-0016-0001) asked that students not be permitted to purchase insurance coverage on the Exchanges, since students might obtain low-quality disaster coverage rather than the more comprehensive self- insured HUSHP. We agree that it would be undesirable for students to enroll in low-quality plans, e.g., disaster coverage. But we do not hold, as Harvard does, that colleges and universities have the authority to determine that any Exchange-based plan does not constitute adequate coverage. The ACA has tied Exchange subsidies to so-called “silver” level coverage, and we believe that these insurance plans should be considered sufficient substitutes for SHPs, self- funded or fully-insured. Accessing these Exchange plans would allow working students, their spouses, domestic partners, and dependents to purchase quality coverage at rates appropriate to their income level.

Thank you for considering these recommendations regarding the proposed regulation.

We appreciate HHS’s attention to the health and financial needs of students.

Graduate Students United, University of Chicago (AFT/AAUP)
Graduate Teaching Fellows Federation (AFT-3544) – Oregon
DePaul University Philosophy Graduate Student Association
Harvard Students for Affordable Healthcare
Micha Rahder, UAW 2865 – Santa Cruz