Nearly a year ago, I addressed the issue of whether or not PPACA regulations would apply to student health insurance policies provided by colleges and universities. The language of the law was unclear on the subject, and didn’t specifically require student health insurance policies to conform to the new rules.
Today, HHS has proposed additional regulations specifically aimed at student health insurance policies, in order to make sure that those plans meet the guidelines created in the PPACA. In essence, it would define student health plans as “individual health insurance coverage” and would eventually obligate student health plans to meet the same requirements as any other individual policy.
We’ve noted in the past that one of the major drawbacks to student health insurance plans is that they often tend to have low annual and/or lifetime maximum benefits, especially when compared with standard individual health insurance policies (this was true even before the PPACA rules took effect – most reputable individual health insurance plans in Colorado had lifetime maximums of $2 million to $5 million or more, before reform. That was definitely not the case for health policies offered by the various colleges in Colorado).
The proposed regulations would provide for a transitional time, with policies starting before September 23, 2012 allowed to have annual limits as long as they were not less than $100,000. After that date, student health insurance policies would have to be fully compliant with PPACA guidelines, the same as any other individual policy.
In addition, the proposed regulations would also require a new level of transparency in the student health insurance market, as carriers providing student health insurance would be required to tell students whether or not their policy meets PPACA guidelines.
It’s good to hear some clarification from HHS on this issue. Expanding the definition of individual health insurance coverage to include student health plans is an important step towards making sure that students don’t find themselves in a situation where a catastrophic medical issue results in bankruptcy due to low benefit limits.