Student Health Insurance
Background Information: On February 11, 2011, the Department of Health and Human Services (HHS) published a Notice of Proposed Rulemaking in the Federal Register relating to student health insurance coverage. The proposed regulation clarifies the circumstances under which health insurance sold to students enrolled in colleges and universities is considered a type of individual health insurance coverage. It also provides that certain Public Health Service (PHS) Act requirements would be inapplicable to such coverage. The policy set forth in the proposed rule would be applicable to policy years beginning on or after January 1, 2012.
Q. What student health plans are affected by the proposed rule?
A. Student health plans that will now be considered “individual health insurance coverage” include those that meet the following criteria:
Plans provided by a college or university through a health insurance company. (This excludes health insurance plans for students that are self-funded by the college or university.)
Plans that are only available to students enrolled in the college or university sponsoring it, as well as their dependents.
Plans that are available to students regardless of their health status.
Q. How is health insurance sold to students considered to be “individual health insurance coverage” different than “short-term limited insurance”? Do PHS Act requirements apply?
A. The proposed regulation clarifies the circumstances under which health insurance sold to students is considered individual health insurance coverage, as opposed to short-term limited duration insurance. Insurance coverage that meets the definition of short-term limited duration insurance is not subject to PHS Act requirements.
With respect to student policies that are individual health insurance coverage, HHS will not consider PHS Act requirements to apply to such coverage for policy years that begin before the first policy year to which the final regulation will be applicable. In addition, issuers that had a reasonable belief that the insurance coverage that they were providing to colleges and universities met the definition of short-term limited duration insurance will not, for purposes of federal law, be considered to be out of compliance pending the start of the first policy year to which the final regulation will be applicable.
Starting with the first policy year to which the final regulation will be applicable, any student health insurance coverage (that is, any insurance sold to students that does not meet the definition of short-term limited duration insurance set forth in 45 C.F.R. §144.103) will be subject to all requirements that will apply to student health insurance coverage under the final regulation.
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