April 2010 Health Care Reform Update - ACHA Confident about Preserving Affordable SHIBPs

04/20/10.The American College Health Association (ACHA), in collaboration with the American Council on Education, Association of American Universities, and the Association of Public Land-Grant Universities, has been actively engaged in efforts to assure the preservation of high quality, cost-effective student health insurance/benefit plans (SHIBPs) during the recent passage of health care reform legislation. While there continues to be contrasting opinions on the impact of the new law, ACHA leadership remains confident that Congress had no intent to disrupt the ability of institutions of higher education (IHE's) to offer SHIBPs. This intent was reflected in the language within the bill stating that nothing in the Act should be construed to prohibit institutions of higher education from offering a student health insurance plan.

In the months ahead, ACHA will work with our colleagues in the higher education community and the Obama Administration to obtain further clarification in regard to the rules that will apply to SHIBPs as the new health reform law is implemented. If it is determined necessary, ACHA will also ask Congress to add clarifying language to the anticipated health reform technical corrections bill that will likely be developed and adopted by Congress prior to the time that most provisions of the new law become effective in 2014. Key Senate and House staffers have personally reassured ACHA leadership and our colleagues in other higher education associations of their willingness to work with us to obtain favorable agency interpretations for SHIBPs, and if needed, to include corrective language in the anticipated technical corrections legislation to preserve desirable funding and underwriting models for college student insurance.

The following are excerpts of a proposal submitted to Congress in January 2010. While this proposal and many other worthy language changes were ultimately not included in the final legislation due to the difficult procedural posture of the bill, Congressional members and staff are aware of ACHA's concern and will continue to work with us to provide corrective action during regulatory implementation of the bill:


IMPACT OF LEGISLATIVE LANGUAGE:

H.R. 3590 established the intent to allow continuation of comprehensive college student health insurance/benefit plans. Title I, Subtitle G, Section 1560(c) stated that nothing in the Act should be construed to prohibit institutions of higher education from offering a student health insurance plan. This language was a helpful recognition of the important role that institutions of higher education play in providing student insurance and signaled the intent to preserve college student health insurance. However, the ability to continue offering high quality, cost advantageous SHIBPs on a group-like basis may no longer be possible because, by default and without additional clarification, SHIBPs may be interpreted as being subject to individual market rating requirements because of the way in which the group market is exclusively defined as an employer-based market of insurance in Title I, Subtitle D, part I, Section 1304 “Definitions Related to Markets”.

Since Section 1304 defines the individual market as “the market for health insurance coverage offered to individuals other than in connection with a group health plan”, there needs to be clarifying language in the final bill to enable colleges and universities to continue offering low cost, high quality, group-like plans to their students. Otherwise, students will likely face substantial increases in college health insurance premiums.

PROPOSAL:

Remove current 1560(c) Rule of Construction and replace with the following rule:

For purposes of this Act, and any subsequent amendments, college or university sponsored student health insurance coverage shall not be considered to be coverage offered in the individual market, provided that such student health insurance coverage meets the following requirements. Student health insurance coverage:

(1) must be offered by an “eligible educational institution" as defined in sections 101, 102(a)(1)) and 102(b)) of the Higher Education Act of 1965 (20 U.S.C. 1001 and 1002),

(2) is made available to eligible students and their eligible dependents as defined by the policy without regard to health status,

and,

(3) must meet, at a minimum, the actuarial standards for the Bronze Plan as defined in this Act.


ACHA last updated its guidelines document Standards for Student Health Insurance/Benefits Programs [pdf] in March 2008.  ACHA stands behind these guidelines which support the implementation and operation of comprehensive and affordable student health insurance plans. Thus, ACHA supports all efforts to eliminate low quality plans.

ACHA will continue to provide periodic updated information as the process unfolds. The association anticipates that it may require several months to craft the necessary corrections to legislation or regulations.