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Business and Policy Areas
Business and Policy Areas

Health Care Reform Update: Proposed Rule on Student Health Coverage

February 25, 2011

On February 11, the Department of Health and Human Services (HHS) published proposed rules addressing the status of student health insurance coverage under the Affordable Care Act (ACA).

In an August 12, 2010 letter, the American Council on Education, NACUBO, and a number of other organizations expressed concerns to the HHS Secretary about the application of the ACA to college student health insurance. ACA requires all individuals to obtain health insurance by 2014. It was unclear if student health care plans could be classified as group plans under the law since they are not employer-sponsored coverage. If such plans were treated as individual market coverage, they would be required under the law to be open to anyone .If student plans did not fall into either category, they would not be deemed to meet the "minimum essential coverage" requirement and students would have to find alternative coverage or be subject to penalties when the individual mandate takes effect.

The proposed rules define student health plans as "individual health coverage." To be considered "individual health insurance coverage" under the ACA, student health plans would have to meet certain conditions. The plans:

  • would have to be offered pursuant to a written agreement between an institution of higher education and a health insurance provider;
  • could cover the student and the student's dependents;
  • could not make coverage available other than in connection with enrollment;
  • could not deny coverage based on pre-existing conditions or other health status-related factors;
  • must ensure that preventative care is provided without co-payments (but separate health center fees not tied to insurance coverage would not be considered co-payments); and,
  • could not have lifetime limits on the dollar value of essential health benefits.

While the plans cannot impose lifetime dollar limits, annual dollar limits would be phased in during a transition period provided by HHS. For policy years beginning before September 23, 2012, annual dollar limits could not be lower than $100,000. For policy years beginning on or after September 23, 2012, annual dollar limits would have to be at least $2,000,000, the same limit imposed on other types of plans. Beginning in 2014, annual limits are not allowed.

Because student health plans would not be subject to provisions relating to guaranteed availability and renewability, and for the transition period, the standard annual dollar limits, insurance companies would have to notify students enrolled in student health plans that the plan does not meet certain minimum standards imposed by the ACA.

Note that plans that are self-funded by an institution would not be covered under the proposed rules because they do not fit the definition of either individual insurance coverage or group health plans under the Public Health Service Act and HHS has no authority to regulate them. Such plans may be subject to state regulation.


The proposed regulations are scheduled to take effect January 1, 2012. Comments are due to HHS by April 12, 2011.

Additional resources


Michele Madia
Director, Environmental Leadership