Friday, September 3, 2010

Is ACA really a threat to student health plans?

The uproar over a letter sent in August by the American Council on Education (ACE) to Kathleen Sebelius, Secretary of the HHS, raises the question of whether or not the Patient Protection and Affordable Care Act (ACA) really poses a threat to student health plans. According to the letter, the ACE is concerned that the application of several provisions under the ACA could eventually make it impracticable for institutions of higher learning to continue offering student health plans.

The ACE's letter focuses on the individual mandate, which requires Americans to obtain minimum essential health insurance coverage by 2014 or pay a penalty. The ACE is concerned that most student health plans, because they typically consist of short-term coverage as defined by HIPAA, would not meet the definition of "minimum essential coverage" under Sec. 5000A(f)(1) of the ACA, meaning that students would have to purchase additional coverage if they wanted to avoid the penalty.

The ACE is asking the HHS to issue guidance clarifying that student health coverage be considered "minimum essential coverage" under the individual mandate if it meets certain specified requirements.

Conservatives are pointing to the ACE letter as one example of possible detrimental effects of the ACA on Americans' current health care coverage, arguing that the ACA will, despite promises from the White House, result in the eventual demise of cheap university health care plans. More liberal commentators, on the other hand, are pointing out that the ACE is merely asking for clarification.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.


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