April 13, 2012
Department of Health and Human Services Releases Regulations for Student Health Plans
~ written by Char Bigelow, Client Advocate in the Human Capital Practice of Willis of Ohio, Inc.
Last month the Department of Health and Human Services released final regulations on student health plans under the Patient Protection and Affordable Care Act. This is an issue for those colleges and universities that make such coverage available to their students. Under the rules, PPACA’s consumer protections that apply to individual plans, such as the prohibition on lifetime dollar limits, restrictions on rescission of coverage, and no pre-existing conditions exclusions on enrollees under age 19, will generally apply to student health plans.
The regulations define a student health plan as a type of individual health insurance coverage provided pursuant to a written agreement between an institution of higher learning and a health insurance issuer.
The student health plan (1) can only offer health insurance coverage to enrolled students and their dependents; (2) cannot condition a student or dependent’s eligibility for health insurance coverage on any health status-related factor; (3) must comply with state law.
In addition, it is still considered student health insurance even though it provides coverage to individuals on breaks between academic terms, or on temporary leaves of absence for medical or other reasons, or to those who have recently graduated or otherwise ceased enrollment. There is no minimum threshold for determining student status (e.g., a minimum number of credit hours).
The regulations clarify that student health plans are individual insurance plans, not group plans. The HHS position is that since student health plans are not employment-based, they are not group health plans under the Public Health Service Act. As a result, they are regulated under the PHSA as individual plans (regardless of whether some states treat such plans as group coverage). Under the PHSA, health insurers providing individual health insurance coverage to any individual must renew or continue the coverage in force at the option of the individual. However, the regulations provide an exemption from the guaranteed availability and guaranteed renewability requirements for student health plans.
HHS also takes the position that fully-insured student health plans are generally not “short-term limited duration insurance” exempt from PPACA’s consumer protections (such as the prohibition on lifetime limits, pre-existing condition exclusions and rescission). While the terms of coverage for student health plans are frequently for less than 12 months, they do not meet the portion of the definition of “short-term limited duration plan” dealing with the availability of extensions. Student health insurance policies generally are renewable each year at the option of the student as long as the student remains in school.
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