Student Health Insurance - Key Points of Reform Regulations

Daniel Stone

·         The proposed rule defined student health insurance coverage as a type of individual market health insurance coverage offered to students and their dependents under a written agreement between an institution of higher education and an issuer.

·         The proposed rule would exempt student health insurance coverage from the guaranteed availability requirements of PHS Act section 2741(e)(1) and the guaranteed renewability requirement of PHS Act 2742(b)(5).  The proposed rule also would provide that student health insurance coverage could not establish an annual dollar limit on coverage lower than $100,000 for policy years beginning prior to September 30, 2012.  The proposed rule would apply the generally applicable annual dollar limit requirements for individual health coverage for subsequent policy years.

·         The proposed rule would clarify that student administrative health fees were not cost sharing for purposes of PHS Act section 2713, which requires that certain preventive services be covered without cost-sharing.

·         The proposed definition of student health insurance coverage would not prevent consortia of universities or State boards of regents from acting on behalf of an institution of higher education in entering into a written agreement with an issuer to provide student health insurance coverage since those bodies are either a collection of universities or part of the university system.  Student associations sponsoring insurance plans are not institutions of higher education.

·         Student health insurance plans have flexibility in determining which dependents, if any, are eligible for coverage under their plan terms.  Similarly, students health insurance plans would have discretion under the proposed rule to allow temporary continuation of coverage upon events such as the loss of student status.

·         The effective date of this rule is intended to provide issuers and universities that operated with a reasonable belief that their policies were short term limited duration coverage to come into compliance with the Affordable Care Act.  While there may be instances where short term limited duration coverage is appropriately sold to students- for instance, foreign students studying for only one semester in the United States or US citiens studying abroad for one summer- the short term limited duration model does not apply to coverage that a student could have through the same health insurance issuer for one or more years during the course of his or her undergraduate education.

·         The proposed rule acknowledged that because self funded student health plans are neither health insurance coverage nor group health plans as those terms are defined in the PHS Act, HHS has no authority to regulate them, including extending Affordable Care Act policies to them.

·         The following schedule for restrictions on annual dollar limits – (1) annual limits of no less that $100,000 for policy years beginning on or after July 1, 2012 but before September 23, 2012, (2) annual limits of no less than $500,000 for policy years beginning on or after September 23, 2012, but before January 1, 2014, and (3) consistent with section 2711, no annual dollar limits for policy years beginning on or after January 1,2014.

·         Student health insurance coverage must include the preventive services specified under PHS Act section 2713 and the implementing regulations.  However, PHS Act section 2713 and the implementing regulations do not prevent student health insurance coverage from coordinating with student health centers to ensure the provision of these services.

·         The proposed rule does not prevent a student health insurance plan from designating providers at a student health center as its in network providers and allowing students to choose from among those providers for purposes of satisfying section 2719A, provided that the centers have sufficient provider capacity and range of services available to support this designation.

·         Any coverage in which an individual is newly enrolled after March 23,2010 is non-grandfathered.

·         The college or university and the issuer of the student health insurance coverage will also be subject to the temporary one-year enforcement safe harbor, and contraceptive benefits will not have to be provided in its students health insurance plan until policy years beginning on or after August 1, 2013/  Satisfaction of such terms includes sending the requisite notice to the students enrolled in the student health insurance plan and the institute of higher education maintaining on file the requisite self-certification.

·         The amendment to Part 158 provides that the expereicne for student coverage is to be reported separately from other individual market coverage.  Further, given that student health insurance coverage is provided a separate pool, apart from other individual market coverage, the amendment provides for national aggregation of student health insurance coverage.

·         This amendment to Part 158 provides that the calculation of incurred claims and quality improving activities is to be multiplied by 1.15 in 2013.

·         No special treatment is provided in MLR reporting year 2014 and beyond.

·         We maintained the calendar year MLR reporting structure for student coverage because, under Part 158, issuers currently report other individual market coverage on a calendar year basis.  In addition, issuers of student health insurance coverage will be subject to the rebate provisions in Part 158, consistent with other individual market coverage.

·         The rule includes conforming changes regarding how credibility adjustments are applied to the student health insurance market.