ACA Updates ACA Resources
This updated April 21, 2014, posting of Frequently Asked Questions (FAQs) provides general information regarding the Affordable Care Act (ACA) and its effect on college student health coverage.
The questions (Q) and answers (A) below attempt to answer most of the common questions; however, this document is only intended to highlight some of the ACA requirements applicable to student health insurance plans. It is not intended to be a complete description of any or all of the ACA requirements.
PLEASE NOTE: The American College Health Association (ACHA) is not positioned to provide advice nor address questions about student health insurance coverage offered by a specific institution of higher education. Instead, such questions should be directed to institutional officials.
Q1: When are the final regulations effective?
A1. The final regulations generally became effective for policy years beginning on or after July 1, 2012. The medical loss ratio amendments became effective for all student health insurance plans as of January 1, 2013 regardless of the policy year. Grandfathering rules are effective for individual health insurance policies in effect on March 23, 2010; however, policy changes such as increases in coinsurance, elimination of benefits or significant increases in co-payments or cost-sharing will cause a loss of grandfathered status. Any coverage in which a student was newly enrolled after March 23, 2010, is non-grandfathered and subject to the ACA requirements applicable to student health insurance plans under the final regulations.
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Q2: Is my plan affected; how does ACA define "student health insurance coverage"?
A2. Not all health insurance coverage offered to students is included in the definition of "student health insurance coverage." The final regulations define student health insurance coverage as a type of individual health insurance coverage for ACA purposes if it is provided pursuant to a written agreement between an institution of higher education (as defined in the Higher Education Act of 1965) and a health insurance issuer, and provided to students enrolled in that institution and their dependents, that meet the following conditions:
- Does not make health insurance coverage available other than in connection with enrollment as a student (or a dependent of a student) in the institution;
- Does not condition eligibility for the health insurance coverage on any health-status — related factor (i.e., health status, physical medical conditions, mental illness, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, and disability) relating to a student (or a dependent of a student); and
- Meets any additional requirements that may be imposed under state law.
The final regulations do not set a minimum threshold for determining student status under student health insurance plan coverage (i.e., requiring enrollment in a specific number of course hours each term or seeking a degree). These eligibility decisions are left to each college or university and the insurer.
The preamble to the final regulations clarified that student health insurance coverage for purposes of the final regulations includes coverage offered by a consortia of universities or State boards of regents acting on behalf of an institute of higher education. However, the final regulations do not apply to student health insurance coverage offered by other organizations such as student associations or high schools, which must comply with the ACA as individual health insurance coverage unless another exemption is available. For example, student associations may qualify as "bona fide associations" under the ACA which are exempt from the guaranteed availability and renewability requirements (see Q/A 5).
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Q3: What documentation is required; how would my student health insurance plan satisfy the written agreement requirement?
A3. The written agreement requirement may be satisfied with a master insurance policy between the issuer and the college or university.
If the college or university is not the policyholder and the students themselves are the policyholders, there must be a written agreement between the insurer and the college or university that clearly describes the college's or university's role in:
- selecting, terminating, and replacing the insurer;
- choosing or negotiating the policy terms;
- setting student and dependent eligibility terms;
- publicizing, endorsing, or recommending the policy to students and dependents; and/or
- providing students and dependents with assistance in obtaining benefits or appealing denials under the coverage.
The written agreement must also describe any eligibility for coverage, if any, for limited periods of time to students who are on breaks between academic terms, on temporary leaves of absence for medical or other reasons, or have recently graduated or otherwise ceased enrollment in the college or university.
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Q4: Do the final regulations apply to my plan if it is a self-insured student health plan?
A4. No. The final regulations acknowledged that the U.S. Department of Health and Human Services ("HHS") has no authority to regulate self-funded student health plans. Self-funded student health plans are not subject to the ACA, but may be regulated by the states. However, certain self-funded student health plans may qualify as "minimum essential health coverage" for purposes of satisfying the individual coverage mandate (see Q/A 26).
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Q5: Is my student health insurance plan subject to ACA's guaranteed availability and guaranteed renewability requirements?
A5. No. The final regulations exempted student health insurance plans from the requirements that enrollees be able to renew or continue the coverage at their option. Student health insurance plans are not required to be available for non-students or to enrollees who have ceased to be students. However, some flexibility is provided to allow temporary continuation of coverage upon the loss of student status. The preamble to the final regulations provided that 90 days would be a reasonable amount of time to allow a graduating student to transition to other coverage.
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Q6: Is my student health insurance coverage subject to ACA's single risk pool requirement?
A6. No. Final health insurance market rules issued by HHS on February 27, 2013, provided that issuers are permitted to maintain a separate risk pool for student health insurance coverage rather than including them in the general individual market risk pool. Although student health insurance coverage is subject to the premium rating requirements of the ACA, the premium rate may be based on a school-specific group community rate if the issuer offers the coverage without rating for age or tobacco use. However, the preamble to these final regulations noted that the exemption of student health insurance coverage from the single risk pool requirement is a transitional policy and that HHS intended to monitor student health insurance coverage as the insurance market transitioned to the 2014 market reforms. HHS intends to revisit this policy in the future. The final health insurance market rules may be viewed at the following link:
https://www.federalregister.gov/articles/2013/02/27/2013-04335/patient-protection-and-affordable-care-act-health-insurance-market-rules-rate-review
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Q7: Can my institution continue to have a student administrative health fee?
A7. Yes. For ACA purposes, a "student administrative health fee" is a fee charged by the college or university on a periodic basis to students of the college or university to offset the cost of providing healthcare through health clinics regardless of whether the students utilize the health clinics or enroll in a student health insurance plan.
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Q8: Can my student health insurance plan include lifetime dollar limits?
A8. No. Student health insurance plans may not establish lifetime limits on the dollar value of "essential health benefits" for any enrollee. This prohibition became effective for policy years beginning on or after July 1, 2012.
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Q9: Can my student health insurance plan contain annual dollar limits on essential health benefits?
A9. No. Prior to 2014, policies were not required to cover essential health benefits; but if they were included in a student health insurance plan, the ACA restricted the maximum annual limit a policy could impose. In response to concerns expressed in the public comments that removing the annual limits would prohibitively increase the cost of student health insurance plans, the final regulations modified the proposed rule by phasing in the maximum annual limits (formerly):
- $100,000 for policy years beginning on or after July 1, 2012 but before September 23, 2012; and
- $500,000 (as opposed to $2 million) for policy years beginning on or after September 23, 2012 but before January 1, 2014.
Annual limits for "essential health benefits" were completely prohibited for policy years beginning on or after January 1, 2014. In addition, student health insurance plans must cover all essential health benefits effective January 1, 2014. However, in some cases transition relief could apply to extend application of the ACA requirement to cover essential health benefits for an additional policy year (see Q/A 29).
For example, a student health insurance plan with a $100,000 annual limit that renewed on August 1, 2012, could retain the $100,000 limit for the 2012/2013 plan year, but was required to increase its annual limit to no less than $500,000 when it renewed on August 1, 2013. The plan is required to eliminate its annual limit when it renews on August 1, 2014.
For these purposes, "essential health benefits" include:
- Ambulatory patient services;
- Emergency services;
- Hospitalization;
- Maternity and newborn care;
- Mental health and substance use disorder services, including behavioral health treatment;
- Prescription drugs;
- Rehabilitative and habilitative services and devices;
- Laboratory services;
- Preventive and wellness services and chronic disease management; and
- Pediatric services, including oral and vision care.
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Q10: Can my student health insurance plan "rescind" coverage?
A10. No – except in very limited cases. Student health insurance plans may not rescind the coverage of an enrollee once such enrollee has coverage, unless the enrollee (or a person seeking coverage on behalf of the enrollee)
- performs an act, practice, or omission that constitutes fraud, or
- makes an intentional misrepresentation of material fact.
The student health insurance plan must provide at least 30 days advance written notice to each enrollee who would be affected before coverage may be rescinded. For this purpose, a "rescission" is a cancellation or discontinuance of coverage that has retroactive effect. However, a cancellation or discontinuance is not a "rescission" if:
- the cancellation or discontinuance of coverage has only prospective effect; or
- the cancellation or discontinuance of coverage is effective retroactively to the extent it is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage.
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Q11: Does my student health insurance plan have to cover preventive services?
A11. Yes. Student health insurance plans must provide coverage, and not impose any cost sharing, for "recommended preventive services" (e.g., vaccines). Note that the final regulations provided that "student administrative health fees" (see Q/A 7), are not "cost sharing" for ACA purposes. In addition, the preamble to the final regulations clarified that issuers can arrange for a student health center to serve as an in-network provider for preventive care services offered to students and can designate providers at such student centers to serve as primary care providers if there is sufficient capacity. This requirement became effective for policies renewing on or after September 23, 2010. Additional preventive care guidelines became effective for policies renewing on or after August 1, 2012 requiring coverage of preventive care specific to women, including well-women visits, STD counseling, testing for HIV, and contraception (see Q/A 12).
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Q12: Does my student health insurance plan have to cover contraceptives?
A12. Yes. Effective for policy years that began on or after August 1, 2012, student health insurance plans must provide (without cost sharing) access to all FDA-approved contraceptive methods, sterilization procedures, patient education and counseling for women with "reproductive capacity" as prescribed by a provider.
Religious Employer Exemption:
Religious employers are exempt from the mandate to cover contraceptives for their employees. The final regulations jointly issued by the IRS, U.S. Department of Labor ("DOL") and HHS on July 2, 2013 simplified the definition of religious employer to mean any nonprofit entity referenced in Sections 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code (e.g. churches, synagogues, and other houses of worship, their integrated auxiliaries and conventions or associations of churches, etc.). Religiously-affiliated nonprofit employers such as universities and hospitals are not considered religious employers for this purpose.
Accommodation for Eligible Organizations:
The final regulations also established accommodations for student health insurance coverage arranged by eligible organizations that are religious institutions of higher education. To qualify as an eligible organization, the employer must be a nonprofit organization that (1) opposes providing coverage for some or all of the contraceptive services required to be covered on account of religious objections, (2) holds itself out as a religious organization, (3) is organized and operates as a nonprofit entity, and (4) self certifies that it meets the first three criteria. The self certification would also list the contraceptive services that the eligible organization objects to covering. The eligible organization would be required to maintain the self certification in its records and make it available for examination upon request by federal regulators, issuers, third party administrators, and plan participants or beneficiaries.
Under an accommodation, an eligible organization does not have to contract, arrange, pay or refer for contraceptive coverage. At the same time, separate payments for contraceptive services are available for women in the health plan of the organization, at no cost to the women or to the organization.
In order for insured health plans, including student health plans, to be eligible for the accommodation, an eligible organization must provide a copy of its self-certification to its health insurance issuer. These plans must then provide separate payments for contraceptive services for the women in the health plan of the organization, at no cost to the women or to the organization.
For self-insured health plans, to be eligible for the accommodation, an eligible organization must provide a copy of its self-certification to its third party administrator. The third party administrator must then provide or arrange separate payments for contraceptive services for the women in the health plan of the organization, at no cost to the women or to the organization.
The final regulations may be viewed at the following link:
http://www.ofr.gov/OFRUpload/OFRData/2013-15866_PI.pdf
The results of ensuing legal challenges have affected this exemption for eligible organizations.
- See Proposed Rules setting forth potential changes to the definition of an ‘‘eligible organization’’ that can avail itself of an accommodation with respect to provision of contraceptive coverage.
- Also see Interim Final Rules intended to provide an alternative process that “eligible organizations” may use to provide notice of religious objections.
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Q13: Does my student health insurance plan have to extend health coverage to adult dependents?
A13. Yes. If your student health insurance plan offers dependent coverage of children, it must continue to make such coverage available for an adult child until the child turns age 26 years of age.
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Q14: Can my student health insurance plan impose a preexisting condition exclusion?
A14. No. For policy years beginning on or after July 1, 2012, student health insurance plans may not impose any pre-existing condition exclusions on individuals enrolled in coverage who are under 19 years of age, including applicants for enrollment, who are under 19 years of age.
Subsequently, student health insurance plans were prohibited from imposing pre-existing condition exclusions on any enrollees for policy years starting on or after January 1, 2014 (regardless of the enrollees' age). However, transition relief may apply to delay application of the ACA prohibition on pre-existing condition exclusions for an additional policy year (see Q/A 29).
For this purpose, a "pre-existing condition exclusion" means a limitation or exclusion of benefits (including a denial of coverage) based on the fact that the condition was present before the effective date of coverage (or if coverage is denied, the date of the denial) under the coverage, whether or not any medical advice, diagnosis, care or treatment was recommended or received prior to such date. A "pre-existing condition exclusion" also includes any limitation or exclusion of benefits (including a denial of coverage) applicable to an individual as a result of information relating to an individual's health status before such individual's effective date of coverage (or if coverage is denied, the date of the denial) under the coverage, such as a condition identified as a result of a pre-enrollment questionnaire or physical examination given to the individual, or review of medical records relating to the pre-enrollment period.
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Q15: Are health benefit claims procedures impacted by the ACA?
A15. Yes. The ACA established new internal and external review processes for an insurer's decision regarding a health benefit claim, including expedited "urgent care" decisions and new content requirements for adverse benefit determinations. Enrollees must be (1) provided notice describing these procedures in a "culturally and linguistically appropriate manner," (2) allowed to review their file and present testimony as part of their benefit claim appeals, and (3) allowed to receive continued coverage pending an appeal determination.
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Q16: Can my student health insurance plan contain prior authorization requirements for emergency room services?
A16. No. Student health insurance plans providing emergency room service benefits may not impose a prior authorization requirement — regardless of whether the hospital is in-network or out-of-network. However, student health insurance plans may impose cost-sharing requirements for out-of-network services.
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Q17: Will my student health insurance plan be subject to the minimum medical loss ratio requirement?
A17. Yes, subject to a transition period not applicable to other individual coverage. The final regulations confirmed that the new medical loss ratio ("MLR") requirement (80% of premiums must be spent on clinical services or activities to improve health care quality) apply to student health insurance plans that began January 1, 2013. However, insurers were allowed to use "credibility adjustments" for 2013 (but not subsequent years), which would effectively increase the amount of expenses that were allowed before a rebate was owed for 2013. The final regulations also provided that the experience for student coverage is to be reported separately from other individual market coverage and that student coverage will be aggregated on a national basis for purposes of determining the MLR.
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Q18: Does my student health insurance plan have to distribute explanations of coverage in a particular form?
A18. Yes. Beginning September 23, 2012, issuers of student health insurance policies were required to distribute a comprehensive benefits summary and uniform glossary of terms to students and their beneficiaries who apply for and enroll in a student health insurance policy. This summary of benefits and coverage is intended to provide individuals with standard information to compare medical plans as they make decisions about coverage. The summary must (a) contain a standardized health plan comparison tool, (b) be no more than 4 pages, (c) use 12-point type, and (d) be written in a "culturally and linguistically appropriate manner." The obligation to provide the notice is the responsibility of the issuer in insured plans and the plan sponsor in the case of self-insured plans. More information regarding the summary of benefits and coverage, including detailed examples, can be found on the DOL website at the following links:
Final Regulations, available at http://webapps.dol.gov/federalregister/PdfDisplay.aspx?DocId=25818
Compliance Guide, available at http://webapps.dol.gov/FederalRegister/HtmlDisplay.aspx?DocId=25819&AgencyId=8&DocumentType=2
Summary of Benefits and Coverage Template, available at www.dol.gov/ebsa/pdf/correctedsbctemplate.pdf
Sample Completed Summary of Benefits and Coverage, available at www.dol.gov/ebsa/pdf/CorrectedSampleCompletedSBC.pdf; and
Uniform Glossary of Coverage and Medical Terms, available at www.dol.gov/ebsa/pdf/SBCUniformGlossary.pdf
Additional Guidance and Instructions, available at
Instructions for Completing the SBC — Individual Health Insurance Coverage [pdf]
Why This Matters language for "Yes" Answers [pdf]
Why This Matters language for "No" Answers [pdf]
HHS Information For Simulating Coverage Examples
HHS Coverage Example Calculator and Related Information
Additionally, the insurer was required to include a notice in the policy and any other written materials, including enrollment materials, that the policy being issued for the student health insurance plan does not meet all of the ACA requirements. The final regulations simplified the requirement and added a provision requiring a statement that the student may be eligible for coverage under a parent's plan. This notice is required to be prominently displayed in clear, conspicuous, 14-point bold type. The model language for this notice was:
"Your student health insurance coverage, offered by [name of health insurance issuer], may not meet the minimum standards required by the health care reform law for the restrictions on annual dollar limits. The annual dollar limits ensure that consumers have sufficient access to medical benefits throughout the annual term of the policy. Restrictions for annual dollar limits for group and individual health insurance coverage are $1.25 million for policy years before September 23, 2012; and $2 million for policy years beginning on or after September 23, 2012 but before January 1, 2014. Restrictions for annual dollar limits for student health insurance coverage are $100,000 for policy years before September 23, 2012; and $500,000 for policy years beginning on or after September 23, 2012, but before January 1, 2014. Dollar limits on your benefits may not be the same as other types of coverage. Your student health insurance coverage put an annual limit of [dollar amount] on [which covered benefits — notice should describe all annual limits that apply]. If you have any questions or concerns about this notice, contact [provide contact information for the health insurance issuer]. Be advised that you may be eligible for coverage under a group health plan of a parent’s employer or under a parent's individual health insurance policy if you are under the age of 26. Contact the plan administrator of the parent's employer plan or the parent's individual health insurance issuer for more information."
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Q19: Will my student health insurance plan have to make reports to HHS and enrollees regarding the quality of coverage?
A19. Yes. However, the reporting obligation falls on the insurers providing student health insurance plan coverage. The insurers must make annual reports to HHS and enrollees regarding coverage benefits which improve the quality care.
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Q20: Is my student health insurance plan "short-term limited duration insurance"?
A20. Probably not. "Short-term limited duration insurance" is defined as
“health insurance coverage provided pursuant to a contract with an issuer that has an expiration date specified in the contract (taking into account any extensions that may be elected by the policyholder without the issuer’s consent) that is less than 12 months after the original effective date of the contract.”
Short-term limited duration insurance is specifically excluded from the definition of "individual health insurance coverage" (see Q/A2). Thus, most of the ACA requirements do not apply to short-term limited duration insurance.
Only student health insurance plans that cannot be continued for more than one year will qualify as short-term limited duration coverage. The preamble to the final regulations provided the following examples of qualifying coverage: (1) policies for foreign students studying for only one semester in the U.S. or (2) U.S. students studying abroad for a summer. The short-term limited duration insurance exemption from ACA does not apply to coverage that a student could have through the same health insurance issuer for one or more years during the course of his or her undergraduate or graduate education. The preamble to the final regulations further provided that the Centers for Medicare & Medicaid Services (CMS), which has authority to enforce these rules along with the states, will be monitoring insurers for proper classification of student health insurance plans as either individual health insurance or short-term limited duration insurance coverage. The preamble also provided that CMS is authorized to assess penalties for failure to comply with these requirements.
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Q21: Do any special rules or exemptions under the ACA apply to policies for international students?
A21. No. The preamble to the final regulations clarifies that all student health insurance must comply with the applicable provisions of the ACA without regard to the citizenship of the student insured. International students with a J-1 visa are also required to carry a minimum level of health insurance coverage by the State Department, and those requirements are not eliminated as a result of the application of ACA to such policies. In the preamble to the final regulations, HHS confirms that the ACA and State Department rules do not conflict. Note that insurance sold to international students attending only one or two semesters will most likely qualify as short-term limited duration insurance coverage exempt from the ACA (see Q/A 20 ).
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Q22: Why is my student health insurance plan exempt from certain ACA requirements?
A22. Given the unique characteristics of student health insurance plans and ACA’s rule of construction for such plans, the final regulations specify that a limited number of ACA requirements are inapplicable to student health insurance plans. The ACA rule of construction for student health insurance plans provides that
"nothing…[in ACA] shall be construed to prohibit an institution of higher education (as such term is defined for purposes of the Higher Education Act of 1965) from offering a student health insurance plan, to the extent that such requirement is otherwise permitted under applicable Federal, State or local law."
HHS interprets this ACA provision to mean that if particular ACA requirements would, as a practical matter, have the effect of prohibiting a college or university from offering a student health plan otherwise permitted under Federal, State or local law, such requirements would be inapplicable. HHS has identified several provisions in ACA that would have this effect and several others that might have this effect, including ACA’s guaranteed availability and guaranteed renewability requirements (see Q/A 5).
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Q23: How do the pending legal and political challenges to the ACA impact my student health insurance plan's requirement to comply with ACA and these final regulations?
A23. A number of legal challenges regarding the constitutionality of the ACA have been brought by states, businesses and private citizens who oppose certain aspects of the law. On June 28, 2012, the U.S. Supreme Court upheld the centerpiece of the law, the individual mandate, alleviating much of the uncertainty regarding application of the ACA. Other legal challenges have yet to be decided, but until the U.S. Supreme Court makes a determination impacting the constitutionality of the ACA or a repeal is enacted into law, the ACA is law and remains in full force and effect.
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Q24: Is additional ACA guidance expected?
A24. Yes. The IRS, DOL, and HHS are expected to issue additional guidance in the coming months and years. States will also likely issue guidance relating to the ACA's state mandates.
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Q25: What actions should my student health service (SHS) be taking now?
A25. Most ACA requirements apply to insurers providing student health insurance coverage rather than directly to the SHS. Thus, the insurers will have most of the compliance obligations. The policies issued for insured student health insurance plans must comply with the ACA requirements unless specifically exempted from such requirement.
There is considerable diversity in how colleges and universities design their student health insurance plans in order to meet their particular needs. Thus, colleges and universities (and their SHS) should engage in discussions with their insurance providers, benefits consultants and legal counsel to assess the ACA's impact on their student health insurance plans and coordinate timely compliance.
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Q26: What are the individual coverage mandates? Will my student health insurance plan satisfy the individual mandate?
A26. Starting in 2014, individuals (unless excluded or exempt) are required to obtain "minimum essential health coverage" for themselves and their dependents or they will have to pay a penalty.
"Minimum essential health coverage" includes:
- Medicare, Medicaid, a Children's Health Insurance Program, TRICARE and veteran's health care program;
- Health insurance coverage offered in a state's individual market; or
- Other coverage designated by HHS. In the final regulations issued on July 1, 2013, HHS designated self-funded student health plans as "minimum essential health coverage" for purposes of satisfying the individual coverage mandate for plan years beginning on or before December 31, 2014. For coverage beginning after December 31, 2014, sponsors of self-funded student health plans are required to apply to be recognized as minimum essential coverage through the certification process outlined under the final regulations. (see 78 Federal Register 39494, 39529 (July 1, 2013) available at the following link: www.gpo.gov/fdsys/pkg/FR-2013-08-30/pdf/2013-21157.pdf) These final regulations also designate refugee medical assistance, Medicare advantage plans and state high risk pool coverage (subject to certification for coverage after December 31, 2014) as minimum essential health coverage. All other individual coverage including foreign health and AmeriCorps coverage must be certified to qualify as minimum essential coverage under the final regulations.
Individuals in any of the following groups are excluded from the individual coverage mandates:
- Individuals who qualify as "exempt noncitizens," which is defined as non-U.S. citizens or non-U.S. nationals who are either (1) in the United States unlawfully or (2) who are nonresident aliens;
- Individuals who are incarcerated;
- Religious conscience objectors; or
- Members of a health care sharing ministry.
International students may be subject to the individual coverage mandate if they qualify as a nonresident alien for tax purposes. However, in most cases, non-immigrant international students would probably qualify as "exempt noncitizens" and not be subject to the individual coverage mandate. For general information regarding an international student’s status as a nonresident alien for tax purposes, please refer to the IRS Foreign Students and Scholars webpage at www.irs.gov/Individuals/International-Taxpayers/Foreign-Students-and-Scholars.
Similarly, individuals in any of the following groups are subject to the individual coverage mandates, but exempt from paying the penalty if the mandate is not satisfied:
- Individuals who have "unaffordable coverage" (based on household income and required contributions for coverage);
- Individuals who have income below the threshold for filing a tax return;
- Individuals who are members of an Indian tribe;
- An individual whose first coverage gap experience of a calendar year lasts less than 3 months; or
- Individuals who apply for and receive a hardship exemption from HHS.
Student health insurance plans are designated as a type of individual market coverage that are expected to satisfy "minimum essential health coverage" if such plans meet certain ACA requirements.
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Q27: What are the "health benefit exchanges" implemented by the ACA?
A27. Each state is required to establish a "health benefit exchange" (also referred to as the "Health Insurance Marketplace") effective in 2014 to help individuals and small groups purchase "qualified health plans." A "qualified health plan" must (1) provide the essential health benefits package, (2) be offered by a licensed insurer, and (3) certified by the exchange as qualified. The exchanges are intended to make the comparison of coverages that have met specified quality requirements. However, no one will be required to purchase health insurance coverage through the exchange.
Plans sold through the Health Insurance Marketplace will offer an "essential health benefit package" that provides essential health benefits determined by the state under guidance issued by HHS, limits cost-sharing for such coverage, and provides either the bronze, silver, gold or platinum level of coverage (as defined by the ACA based on actuarial values of coverage). For more information, visit https://www.healthcare.gov.
International students who are lawfully present in the U.S., including those who are exempt from the individual coverage mandate (see Q/A 5), are eligible to purchase coverage in the Health Insurance Marketplace. International students who are lawfully present and meet the income eligibility requirements are eligible for premium subsidies and, if a qualifying taxpayer in the U.S., may be eligible for premium tax credits to help offset the cost of coverage purchased in the Health Insurance Marketplace (see https://www.healthcare.gov/what-do-immigrant-families-need-to-know/).
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Q28: Do any of the ACA requirements for my plan expire in 2014?
A28. Yes.
Annual limits on essential health benefits, which could be applied on a restricted basis prior to 2014, were completely prohibited starting in 2014 and beginning January 1, 2014, student health insurance policies were required to cover all essential health benefits (see Q/A 9).
Also, beginning in 2014, pre-existing condition exclusions for all individuals, regardless of age, are prohibited — this prohibition only applied to children under 19 prior to 2014 (see Q/A 14).
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Q29: Does the transition relief extending deadlines for certain ACA requirements apply to my plan?
A29. Maybe.
On November 14, 2013, President Obama announced that states could elect to delay application of the following ACA requirements for small group and individual policy renewals occurring between January 1, 2014, and October 1, 2014:
- the bar against discrimination in premium pricing based on health status;
- guaranteed issue and renewal;
- the ban on pre-existing condition exclusions and other health status discrimination provisions;
- non-discrimination in health care;
- coverage of essential health benefits; and
- coverage for people participating in approved clinical trials.
Preventive benefits coverage, limits on annual and lifetime coverage, and coverage of children under age 26 still apply. Since student health insurance is treated as a type of individual insurance under the final regulations, the transition relief is expected to be available to renewals of student health insurance policies to the same extent as other individual policies. Note the transition relief is not available for new policies and only applies to renewals of existing coverage.
Some states such as California, Massachusetts, New York and Washington declined to implement the transition relief, and policies issued in those states must comply with the ACA requirements effective for policy renewals on and after January 1, 2014. Even in those states approving the transition relief, such as Florida, Michigan, Ohio and Texas, there is no guarantee that an individual policy, including a student health insurance policy, will be renewed by the carrier without the otherwise applicable ACA requirements. For example, some insurance carriers have already pulled out of the individual market and those continuing to offer individual policies will need to weigh the advantages and disadvantages of renewing policies under the transition relief.
You should contact your insurance carrier for more information on whether the transition relief will apply to your policy renewal.
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Q30: What is the actuarial value (AV) as referred to in the ACA Standards Related to Essential Health Benefits?
A30. As explained by the American Academy of Actuaries, “‘Actuarial value’ measures the relative generosity of benefits covered by a health insurance plan. Under the ACA, a health insurance plan’s actuarial value indicates the average share of medical spending that is paid by the plan, as opposed to being paid out of pocket by the consumer. The calculation takes into account a plan’s various cost-sharing features, such as deductibles, coinsurance, copayments, and out-of-pocket limits. Aside from cost-sharing features, however, the calculation does not reflect other plan features that may be important for consumers who are choosing plans.”
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Q31: How do “metal” tiers relate to actuarial value?
A31. As explained by the American Academy of Actuaries, “Actuarial values are used to categorize plans into different benefit tiers:
- Plans in the bronze tier have actuarial values of 60 percent,
- Plans in the silver tier have actuarial values of 70 percent,
- Plans in the gold tier have actuarial values of 80 percent, and
- Plans in the platinum tier have actuarial values of 90 percent.
Plans within a metal tier have the same actuarial value, meaning they have approximately the same level of benefit generosity. Plans from different tiers have different actuarial values, with different levels of benefit generosity. For instance, a plan in a gold tier is more generous on average than a plan in a bronze tier.”
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Q32: Are student health insurance plans required to adhere to a metal level AV under the Affordable Care Act?
A32.
As we currently understand it, fully insured student health plans are considered individual plans under the ACA and therefore subject to this requirement. These plans must report an actuarial value (AV) within 2 percentage points of one of the four metal levels as indicated below:
- Platinum plans must have an AV within 2 percentage points of 90% (88-92%).
- Gold plans must have an AV within 2 percentage points of 80% (78-82%).
- Silver plans must have an AV within 2 percentage points of 70% (68-72%).
- Bronze plans must have an AV within 2 percentage points of 60% (58-62%).
Self-funded student health plans are not required to have an AV that falls within two points of a metal level; however, starting in 2015, self-funded student health plans will be subject to review by the Department of Health and Human Services in order to maintain their status as Minimum Essential Coverage. See Patient Protection and Affordable Care Act: Exchange Functions; Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage Provisions; Final Rule, July 1, 2013, at www.gpo.gov/fdsys/pkg/FR-2013-07-01/pdf/2013-15530.pdf.
ACHA recognizes that some colleges and universities have had to modify or reduce benefits for their student health plans for 2014/15 in order to adhere to a metal level when their plan has received an AV rating that falls between metal levels. ACHA has advocated to the Centers for Medicare and Medicaid Services (CMS) for some flexibility in this requirement.
An AV calculator can be found at www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/av-calculator-final.xlsm.
Source: DEPARTMENT OF HEALTH & HUMAN SERVICES
Patient Protection and Affordable Care Act: Actuarial Value Calculator Methodology
AGENCY: Department of Health & Human Services
Federal Register 78 CFR 12834 (February 25, 2013); part of the final rule for determining actuarial value at 45 CFR 156.135.
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Q33: Is service performed by students under federal or state-sponsored work-study programs counted in determining whether the student is a full-time employee?
A33. No, hours of service for section 4980H purposes do not include hours of service performed by students in positions subsidized through federal or state work study programs. However, the final regulations do not include a general exception for student employees. All hours of service for which a student employee of an educational organization (or of an outside employer) is paid or entitled to payment in a capacity other than through the federal work study program (or a state or local government’s equivalent) are required to be counted as hours of service for section 4980H.
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Q34: Are services performed by student interns or externs counted as hours of service for section 4980H?
A34. No, services by an intern or extern would not count as hours of service for section 4980H purposes to the extent that the student does not receive, and is not entitled to, payment in connection with those hours. For more information regarding internships and externships, see page 83550 in the Federal Register February 12, 2014, Final Rule.
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Q35: Are services performed by graduate students with assistantships counted as hours of service for section 4980H?
A35. The final rule does not specifically mention graduate assistants. However, since graduate assistants are not considered to be employed in federal or state work study programs and they are usually paid or entitled to payment, it is likely that their hours of service will be counted in determining whether they are a full-time employee for section 4980H purposes (see Question 33).
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Q36: When do the employer shared responsibility provisions take effect?
A36. The employer responsibility provision will generally apply to larger firms with 100 or more full-time employees starting in 2015 and employers with 50 or more full-time employees starting in 2016. (US Treasury Department Fact Sheet, Final Regulations Implementing Employer Shared Responsibility Under the Affordable Care ACT (ACA) 2015.)
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