Some Student Health Plans are Exempt from ACA Requirements

health piggy bankDoes the university your child attends have a fully insured student health plan? Or, is the university self-insured? The answer to that question is important. Some plans that are self-insured are exempt from providing the protections that the Affordable Care Act requires.

The Affordable Care Act provides consumers will many protections that did not exist previous to the implementation of the health reform law. It prohibits private health insurance companies from denying coverage for people who have a preexisting condition. It prohibits health insurers from creating plans that come with an annual coverage cap, or a lifetime coverage cap. These are just a few examples.

Today, many universities require students to have health insurance coverage. In general, it is acceptable for the student to be covered through his or her parent’s health plan, to have an individual plan, or to be covered by the plan that his or her job offers.

However, as those options are not always available to young people who are going to school, it is common for students to purchase the university’s health insurance plan for coverage. In the past, some universities were offering what amounted to a “mini-med” plan which did not meet the requirements of the Affordable Care Act. This has changed.

As of July 1, 2012, student health policies had to cover costs of up to $100,000 of expenses annually. By the Fall of 2012, student health policies had to cover $500,000 of expenses annually. In 2014, student health plans will be prohibited from imposing a cap.

Parents should be aware that universities and colleges that are self-insured are exempt from providing those protections in their student health plans. They will also be exempt from the requirements of the Affordable Care Act that fully insured health plans must adhere to. This means that your child could have inadequate health insurance coverage even though he or she is covered through the university’s student health plan.

According to Inside Higher Ed, there are only about 30 institutions who are self-insured. They are mostly major private and public research universities. This includes many Ivy League institutions and the University of California system. Here is part of what the article at Inside Higher Ed had to say:

“Because the federal government only extended the ACA’s protections to fully insured student health insurance plans, we are concerned that institutions of higher education may begin to self-fund in an effort to avoid new requirements” a set of health care advocacy groups wrote in a report last summer.

“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.”

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