Q. I read about a graduate student at Arizona State who died of cancer in 2013 because his insurer capped how much the policy would pay out over a lifetime at $300,000. Ultimately Aetna relented, but it was too late. Under the Affordable Care Act, can university health plans include lifetime dollar limits?
A. In almost all cases, no, they cannot (self-insured student health plans, discussed below, are not subject to the ACA’s regulations, but very few student health plans are self-insured). In 2011 the government extended the consumer protection provisions in the ACA to students. As of April 2012, lifetime benefit maximums on essential health benefits were prohibited on all new and renewing student health insurance plans (for non-student plans in the individual market, new and renewing policies had to eliminate lifetime benefit maximums in September 2010; the provision didn’t take effect until 2012 for student policies).
Annual limits on essential health benefits were phased out gradually on student health plans, and eliminated entirely as of January 1, 2014 for new and renewing student health insurance policies.
Self-insured student health plans
In 2012, HHS published guidance related to student health plans, but noted that they did not have the authority to regulate self-insured student health plans. At that point, there were an estimated 200,000 students, at roughly 30 schools nationwide, who were covered under self-insured student health plans (there are more than 18 million college students in the US, across 5,300 schools).
A subsequent NAIC brief highlighted the fact that students on self-insured student health plans would not have the same consumer protections that most students would have under the ACA, and called for stronger state regulations for self-insured student health plans (some states don’t allow schools to offer self-insured plans at all, while others have varying regulatory guidance in place). It also notes that federal regulations (ERISA) that apply to self-insured employer-sponsored health plans do not apply to self-insured student health plans. These plans appear to fall into a regulatory grey area.
BYU-Idaho’s non-ACA-compliant self-insured student health plan generated headlines in the fall of 2019, after the school decided to no longer allow students with Medicaid coverage to waive the school’s health plan. Because BYU-Idaho’s plan is self-insured, it is not required to conform to ACA rules. As of 2021, BYU-Idaho’s student health plan had a maximum benefit of only $20,000 per academic year for services provided outside the student health center. However, that limit increased significantly as of 2022, and the plan will now cover up to $400,000 in services outside the student health center (the brochure does still note that the BUY-Idaho student health plan is not considered minimum essential coverage).
Benefits and coverage follow individual market rules, but some regulations are different
Under the ACA, fully-insured student health policies (ie, non-self-insured plans) are considered individual market coverage, although they aren’t subject to the ACA’s single risk pool provision (ie, insurers have to put all of their ACA-compliant individual market plans together in one risk pool — including on and off-exchange plans — but if that insurer has student health plans available via a university in the state, they don’t have to put the student plan in the same risk pool as the individual market plans). And they also aren’t subject to the same guaranteed-issue requirements that apply to the rest of the individual market, since student plans are not available to people who aren’t students (or dependents of students) at a university that offers the plan.
But until 2018, student health plans were subject to the same rate review process as other individual market plans. As of July 2018, however, student health insurance is exempt from the federal rate review requirements that apply to other individual market plans. In finalizing this rule, HHS noted that universities tend to be savvy purchasers with considerable leverage — more like large employers than individual market consumers.
So although student health plans have to comply with all of the benefit and coverage requirements that pertain to the individual market, they don’t have to comply with the single risk pool and guaranteed-issue rules (although coverage must be guaranteed-issue to eligible students), and they no longer have to submit to the same rate review process that applies in the individual market.