Proposed HHS Rule Would Extend Health Care Protections to Student Health Plans

The Department of Health and Human Services (HHS) recently issued a proposed rule to extend the consumer protections created by the 2010 Patient Protection Affordable Care Act (PPACA) to students enrolled in student health plans.

Citing a 2008 Government Accounting Office (GAO) report, HHS explains in its Federal Register notice that 57 percent of all colleges and universities, approximately 2,500 schools, provided student health plans in the academic year of 2007-2008. Covered benefits and plan regulation vary widely between institutions. For example, the GAO concluded that 24 percent of student health plans imposed annual spending limits. These limits ranged from $15,000 to $250,000, with a median of $50,000. HHS estimates that between 1.1 and 1.5 million students and eligible dependents in the United States are currently enrolled in student health plans through their schools.

The proposed rule would define student plans as a form of “individual health insurance coverage.” Adopting this definition would extend the PPACA’s consumer protections to enrollees in student plans.  Insurance companies would not be able to deny coverage to students under age 19 for pre-existing conditions or to drop coverage because of unintentional mistakes on applications. In addition, minimum annual dollar limits on essential health benefits would need to be at least $100,000 for policy years beginning before Sept. 23, 2012, and $2 million thereafter.

The proposed rule would increase transparency in the student health insurance market, requiring insurance companies to tell enrollees in student health plans if their plans meet the PPACA’s requirements.

At the same time as HHS proposes to apply certain PPACA protections to student health plans, the agency also proposes to exempt school plans from certain statutory requirements that could discourage schools from providing student health plans in the first place. For example, under the proposed rule schools would not be required to guarantee students could renew such plans after they were no longer enrolled in school. HHS also seeks comments on whether school plans should be exempt from other requirements, including those concerning the designation of a primary care providers and the prohibition on cost-sharing for preventative services.

HHS has prepared a “fact sheet” on the proposed rule. The agency is taking public comments on its proposed rule through April 12, 2011.