Medicare student health insurance coverage update | OpenPayer
ModifiedMedicarePolicy CMS-9981-F
Student Health Insurance Coverage (Final Rule)
Final rule establishing definitions and special requirements for student health insurance coverage under the PHS Act and the Affordable Care Act; governs issuers and institutions of higher education offering student health plans. Affects students, dependents, issuers, and institutions of higher education.
Policy Summary
PayerMedicare
PolicyStudent Health Insurance Coverage (Final Rule)
Key ActionIssuers must provide a conspicuous notice in policy materials and mail notices to student enrollees when coverage does not meet minimum annual limit standards.
The schedule for permitted annual dollar limits for student health insurance coverage was modified to phase out limits: $100,000 for policy years beginning on or after July 1, 2012 but before September 23, 2012; $500,000 for policy years beginning on or after September 23, 2012 but before January 1, 2014; and no annual limits for policy years beginning on or after January 1, 2014.
Definition of 'student health insurance coverage' adopted as a type of individual market coverage limited to students and their dependents and not including coverage sold by student associations or high schools.
Notice requirement for students modified: simplified model notice using 'health care reform law', informing about annual limit differences and eligibility under a parent's plan, and sunsets when annual limits align with other individual coverage.
Student health insurance coverage experience is to be reported separately and aggregated nationally for MLR purposes, with a 1.15 multiplier applied to the numerator for incurred claims and quality improvement activities in 2013.
Temporary one-year enforcement safe harbor for certain non-profit religious institutions of higher education regarding contraceptive coverage, delaying requirement until policy years beginning on or after August 1, 2013, where applicable.
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3-phaseannual dollar limit transition
Apr 20, 2012rule effective date
1.15xMLR multiplier (2013)
~75issuers required to notify
2,250,000estimated notices/year
~1.1–1.5Mestimated student enrollees
Coverage requirements, applicability, and transitions for student health plans
inv-01: Coverage requirements and exceptions
Covered when ALL of the following requirements or exceptions apply:
Student health insurance coverage must include preventive services specified under PHS Act section 2713, but may coordinate provision through student health centers (issuers may designate campus student health centers as in-network providers).
See allowance for coordination with student health centers; student administrative health fees are not cost-sharing.
Annual dollar limits are subject to a phased schedule: minimum $100,000 for policy years beginning on or after July 1, 2012 and before September 23, 2012; minimum $500,000 for policy years beginning on or after September 23, 2012 and before January 1, 2014; and no annual dollar limits for policy years beginning on or after January 1, 2014.
Issuers must provide a conspicuous notice in the policy/certificate and any plan materials summarizing coverage when the policy does not meet the minimum annual limits; notice uses 'health care reform law' terminology and advises students under age 26 may be eligible for parental coverage; the notice requirement sunsets when annual limits align with other individual coverage.
Temporary exception (one-year safe harbor): Certain non-profit institutions of higher education with religious objections may qualify for a temporary one-year enforcement safe harbor delaying contraceptive coverage until policy years beginning on or after August 1, 2013, if specified conditions (including required notice and self-certification) are met.
Definition and sponsor limitation: student health insurance coverage is offered pursuant to a written agreement between an institution of higher education (or acting body) and an issuer and is limited to students and their dependents; student associations and secondary schools are excluded as sponsors.
Grandfather status is determined under the general grandfathering rules (no special grandfathering is established for student plans).
inv-02: Applicability and coverage stance
Applicability summary — which statutory protections apply to student health insurance and where exceptions or adjustments are specified:
Student health insurance coverage is defined as a type of individual market coverage and is subject to the individual market provisions of the PHS Act and the Affordable Care Act, except for specific, enumerated inapplicabilities under Section 1560(c).
Policy clarifications: Section 1560(c) permits limited exemptions when particular ACA requirements would, as a practical matter, prohibit institutions from offering student plans; CMS may treat certain requirements as inapplicable for that reason.
MLR and reporting: student plan experience must be reported separately and aggregated nationally for MLR purposes; for the 2013 MLR reporting year a 1.15 multiplier is applied to incurred claims and quality improvement expenditures for student coverage; no special MLR treatment after 2013.
Notice and related consumer protections: the notice requirement was streamlined (removal of guaranteed availability/renewability content), uses 'health care reform law' terminology, and includes advising students about parental coverage eligibility; the notice sunsets when annual limits align with other individual coverage.
inv-03: Applicability and transition criteria
Transitional applicability and implementation criteria for issuers and plans:
Categorization: Student health insurance is treated as individual market coverage under the PHS Act and ACA, except where compliance would effectively prohibit an institution from offering a plan under Section 1560(c).
Annual limits transition: phased increases so some enrollees see minimum annual limits of at least $100,000 (policy years beginning on or after July 1, 2012) and later at least $500,000 (policy years beginning on or after September 23, 2012); no annual limits for non-grandfathered plans for policy years beginning on or after January 1, 2014. Approximately 33,000 persons affected early and ~314,000 persons affected in late summer 2013 per CMS estimates.
MLR transition: for MLR reporting year 2013, apply a 1.15 multiplier to the sum of incurred claims and expenditures for activities that improve health care quality for student coverage; credibility and aggregation rules for student market are specified (student experience aggregated nationally).
Safe harbor and other transitions: Temporary one-year enforcement safe harbor for certain non-profit religious institutions regarding contraceptive coverage applies where conditions are satisfied; Departments will work to develop alternative approaches before the safe harbor ends.
inv-04: Student plan transitional coverage criteria
Issuer and consumer-facing transitional requirements that apply during the phase-in period:
Allowed temporary annual dollar limits during transition: issuers may impose annual limits no less than $100,000 for policy years beginning on or after July 1, 2012 and before September 23, 2012, and no less than $500,000 for policy years beginning on or after September 23, 2012 and before January 1, 2014.
MLR temporary adjustment for 2013: issuers may apply a multiplier of 1.15 to total incurred claims and quality improvement expenditures when calculating the MLR numerator for student coverage for the 2013 reporting year; no special multiplier for 2014 and beyond.
Applicability of other ACA protections: students remain protected by prohibitions on rescissions, prohibitions on lifetime limits, dependent coverage to age 26, and preventive services coverage requirements (subject to allowed coordination with student health centers and the clarification that student administrative health fees are not cost-sharing).
Notice requirement to enrollees: issuers must provide notices to students and dependents when coverage does not meet ACA annual limit requirements; CMS estimates ~2 minutes per enrollee or ~1,000 hours per issuer to prepare and mail notices, with estimated per-issuer cost ~$40,840 and total ~$3,063,000.
inv-05: Student plan coverage rules and notices
Issuer obligations and required notices specific to student health insurance coverage:
Definition and eligibility: student health insurance coverage must be provided under a written agreement between an institution of higher education and an issuer, be available only in connection with student enrollment (or as a dependent), not condition eligibility on health-status factors, and meet applicable State law requirements.
Annual limits rules: issuers offering student health insurance coverage must comply with the phased minimum annual limits ($100,000 before Sept 23, 2012; $500,000 for policy years Sept 23, 2012–Dec 31, 2013; full §147.126 compliance for policy years beginning on or after Jan 1, 2014).
Notice content and form requirements: if a student policy does not meet the minimum annual limits, the issuer must provide a notice that states the dollar amount of the annual limit and describes the benefits to which the limit applies; the notice must be prominently displayed in clear, conspicuous 14-point bold type on the front of the policy/certificate and in any plan summary materials; model language is provided in the rule.
Student administrative health fees: defined as periodic institution-charged fees to offset clinic costs and are not considered cost-sharing for specified preventive services under section 2713.
inv-06: Attribution and grandfathering provisions
Grandfathering and attribution rules as revised in related regulatory amendments:
Grandfathering: general grandfathering rules continue to apply; the rule amendments redesignate paragraphs and retain grandfathering language without special treatment for student plans (grandfather status determined under general rules based on enrollment as of March 23, 2010).
Attribution carve-outs based on filing date: An attributable material relationship shall not disqualify a licensee for previously awarded benefits or an applicant with an application filed before April 25, 2006, for spectrum lease or resale arrangements entered into before April 25, 2006; applicants filing after that date or in auctions with bidding beginning on or after June 5, 2006 are subject to different attribution treatment as specified in the amended rule text.
Key coding, regulatory citations, and numeric thresholds
Coding referencesmixed
No specific procedure or diagnosis codes are provided in this section of the document.
codes not specifiedmixed
No specific CPT/HCPCS/ICD codes provided in this excerpt.
MLR estimate table entriesmixed
Table entries estimating number of affected issuers and total rebate amounts under different MLR calculation assumptions (no multiplier vs 1.15 multiplier): Number of affected issuers = 14; Total rebate amount = $53,460,000 (no multiplier). Number of affected issuers = 7; Total rebate amount = $7,115,000 (with 1.15 multiplier).
Regulatory citations amendedmixed
No codes listed
inv-11: Annual dollar limit schedule
Phase 1 (policy years beginning July 1, 2012–Sept 22, 2012)>= $100,000 minimum annual dollar limit on essential health benefits
Phase 2 (policy years beginning Sept 23, 2012–Dec 31, 2013)>= $500,000 minimum annual dollar limit on essential health benefits
Phase 3 (policy years beginning on or after Jan 1, 2014)No annual dollar limits permitted (must comply with §2711/§147.126)
inv-12: MLR standard and adjustment
MLR minimum standard80% minimum medical loss ratio standard applies to individual market coverage
2013 student-plan numerator adjustment
Issuer and institution obligations, notices, and operational actions
Note
Issuer notification and MLR transition
Issuer notification and MLR transition: Issuers of student health insurance coverage must provide notices to enrollees when the plan does not meet the minimum annual dollar limits required under section 2711 of the PHS Act. The notice must include the dollar amount of the annual limit and a description of the plan benefits to which the limit applies, state that students under age 26 may be eligible for coverage as dependents under a parent's employer or individual market plan, and be prominently displayed in 14-point bold type on the front of the policy or certificate and in any plan materials summarizing coverage (such as a summary description). The notice requirement applies for policy years beginning before January 1, 2014. Issuers may use the model language provided (or substantially similar language) and may incorporate the issuer or plan name into the notice and print it in plan or policy documents regularly sent to student enrollees. HHS estimated the compliance burden (preparation and mailing) and associated costs per issuer and overall; issuers should follow existing Part 158 reporting practices for MLR and rebate obligations but note that student plan experience must be reported separately from other individual market coverage and will be aggregated nationally. For MLR reporting year 2013 only, incurred claims and quality-improving activities for student health insurance coverage are multiplied by a factor of 1.15 to phase in the MLR numerator adjustment; the calendar year reporting period for MLR applies beginning January 1, 2013. Issuers of student coverage remain subject to the rebate provisions in Part 158 and rebates must be distributed directly to student enrollees in the same manner as other individual market coverage. Conforming rules clarify application of life-years and credibility adjustments to the student market.
Notice must include dollar amount of annual limit and description of covered benefits to which it applies
Notice must state potential eligibility as a dependent under a parent's plan if under age 26
Key definitions and clarifications
inv-24: student health insurance coverage
Definition (core)Student health insurance coverage: individual health insurance provided pursuant to a written agreement between an institution of higher education and an issuer to students enrolled and their dependents
Eligibility limitsCoverage must be made available only in connection with enrollment as a student or dependent and may not condition eligibility on health‑status factors
Sponsors excludedStudent associations and high schools are not considered institutions of higher education under this definition and therefore generally are not sponsors of student health insurance coverage
inv-25: student administrative health fees
DefinitionStudent administrative health fee: periodic fee charged by an institution to students to offset costs of providing health care through campus health clinics regardless of utilization or enrollment in student coverage
Policy Summary
PayerMedicare
PolicyStudent Health Insurance Coverage (Final Rule)
Key ActionIssuers must provide a conspicuous notice in policy materials and mail notices to student enrollees when coverage does not meet minimum annual limit standards.
State interaction: States may impose more stringent requirements or continue to treat student coverage as group/blanket coverage provided such standards do not prevent application of applicable individual market PHS Act requirements; short-term limited duration coverage for certain foreign students may be permitted and not subject to PHS Act/ACA in those cases.
Administrative impacts: issuers will incur costs to provide required notices (CMS estimates ~2 minutes per enrollee, ~1,000 hours per issuer; total annual cost burden ~$3,063,000 across affected issuers).
MLR rebate estimates: CMS provides illustrative estimates of affected issuers and rebate totals under alternative MLR calculations (e.g., without the multiplier: 14 issuers / $53,460,000; with 1.15 multiplier: 7 issuers / $7,115,000).
Provider designation: Issuers may designate student health center providers as in-network providers for purposes of satisfying provider choice where appropriate (no blanket exemption from provider choice requirements).
Multiply incurred claims and quality improvement expenditures by 1.15 for MLR reporting year 2013 for student coverage
Post-2013 treatmentNo special MLR treatment for student plans in MLR reporting year 2014 and beyond
inv-13: phased annual limit thresholds
Early transition (July 1, 2012)Approximately 280,000 enrollees will see annual limits increase to at least $100,000 for policy years beginning on or after July 1, 2012 but before Sept 23, 2012
Late-summer 2013 transition (Sept 23, 2012 effect into 2013)Approximately 314,000 enrollees will see annual limits increase to at least $500,000 for policy years beginning on or after Sept 23, 2012 but before Jan 1, 2014
Full compliance (on/after Jan 1, 2014)No non-grandfathered student plans may have annual dollar limits for policy years beginning on or after Jan 1, 2014
inv-14: Allowed temporary annual dollar limits
Permitted temporary limit before Sept 23, 2012Issuers may set annual dollar limits on EHBs no lower than $100,000 for policy years beginning on or after July 1, 2012 but before Sept 23, 2012
Permitted temporary limit Sept 23, 2012–Dec 31, 2013Issuers may set annual dollar limits on EHBs no lower than $500,000 for policy years beginning on or after Sept 23, 2012 but before Jan 1, 2014
Prohibition thereafterFor policy years beginning on or after Jan 1, 2014, issuers must follow §147.126 and cannot impose annual dollar limits on EHBs for non-grandfathered plans
inv-15: MLR multiplier for 2013
2013 multiplierIssuers may multiply the sum of incurred claims and quality‑improvement expenditures by 1.15 for student coverage for MLR reporting year 2013
PurposePhase‑in adjustment to account for unique administrative costs in the student market and provide glide path to 80% by 2014
DurationApplies only to MLR reporting year 2013; no continuation into 2014+
inv-16: Annual dollar limits for student health insurance coverage
Minimum limit before Sept 23, 2012Student plans may have annual limits on EHBs no lower than $100,000 for policy years beginning before Sept 23, 2012
Minimum limit Sept 23, 2012–Dec 31, 2013Student plans may have annual limits on EHBs no lower than $500,000 for policy years beginning on or after Sept 23, 2012 but before Jan 1, 2014
Compliance from Jan 1, 2014For policy years beginning on or after Jan 1, 2014, student health insurance coverage must comply with §147.126 (no annual limits for non-grandfathered plans)
Notice displayed in 14-point bold on front of policy/certificate and in summary materials
Notice required for policy years beginning before January 1, 2014
Issuers may use model language or substantially similar language and incorporate issuer/plan name
Student plan MLR experience reported separately from other individual market coverage and aggregated nationally
MLR reporting year for student coverage is calendar year beginning Jan 1, 2013
For MLR reporting year 2013, incurred claims and quality activities multiplied by 1.15 for student plans
Issuers subject to Part 158 rebate rules; rebates distributed directly to students
Conforming changes govern life-year and credibility adjustments for student market
Note
Rule amendments and grandfathering
Rule amendments and grandfathering: Student health insurance coverage is defined as a form of individual market coverage, and therefore the standard grandfathering rules that apply across markets govern student plans; HHS did not adopt special grandfathering treatment for student plans. Grandfather status is determined for each coverage contract under the generally applicable rules (i.e., the same rules used for other individual market coverage). The final rule acknowledges commenters’ concerns about timing and operational challenges but confirms that HHS lacks legal discretion to alter the general grandfather rules for student coverage. Issuers and institutions should apply the existing grandfather status tests to each student plan and treat student health insurance coverage consistent with individual market grandfathering provisions.
Student health insurance coverage is treated as individual market coverage for grandfathering purposes
No special grandfathering exceptions or alternative assessment periods were adopted
Grandfather status must be determined for the coverage in which each enrollee is enrolled under the general rules
Non‑cost‑sharing clarification
Student administrative health fees are not considered cost‑sharing under PHS Act section 2713 for specified recommended preventive services
Relation to clinic accessFees support campus health clinic services for all students, including those not enrolled in student health insurance coverage
inv-26: student health insurance coverage (summary)
CategorizationStudent health insurance coverage is defined as a type of individual health insurance coverage for purposes of applying most PHS Act and ACA individual‑market protections
Specified inapplicabilityCertain provisions are specified as inapplicable or adjusted under section 1560(c) when necessary to allow offering of student plans
EffectivenessProvisions generally effective for student policy years beginning on or after July 1, 2012
inv-27: MLR reporting year for student coverage
MLR reporting yearMLR reporting year for student coverage is set on a calendar year basis beginning January 1, 2013
AggregationStudent coverage experience will be aggregated nationally as its own pool and reported separately from other individual market coverage
RebatesStudent‑market rebates are distributed directly to the student consistent with other individual market coverage
inv-28: student health insurance coverage definition (alternate)
Section 1560(c) effectIf an ACA requirement would effectively prohibit an institution of higher education from offering a student plan, that requirement may be inapplicable under section 1560(c)
ScopeStudent coverage remains subject to most individual‑market provisions unless application would prevent offering the plan
State law interactionState law requirements still apply; CMS interprets 1560(c) narrowly to avoid practical prohibitions on offering coverage
inv-29: Student health insurance coverage (detailed)
Transition allowancesIssuers may impose temporary annual limits ($100k or $500k) and apply a 1.15 MLR numerator multiplier for 2013 to accommodate student‑market administrative costs
Preventive servicesStudent plans must include preventive services under section 2713 but may coordinate provision through student health centers (issuers may designate campus centers as in‑network)
Notice and other protectionsStudents retain ACA protections such as dependent coverage to age 26, prohibitions on rescissions and lifetime limits; issuers must provide conspicuous notices where annual limits do not meet section 2711 requirements
inv-30: Student administrative health fees (cost-sharing clarification)
Cost‑sharing clarificationStudent administrative health fees are not considered cost‑sharing for specified preventive services under section 2713
Notice burden estimateCMS estimates ~2 minutes per student to prepare and mail notices (~1,000 hours per issuer; ~$40,840 per issuer; ~$3,063,000 total across affected issuers)
Practical effectFees support clinic services that give all students access regardless of enrollment in student insurance
inv-31: Religious institution contraceptive safe harbor
Temporary one‑year safe harborOne‑year enforcement safe harbor for certain non‑profit institutions of higher education with religious objections to covering contraceptive services
TimingWhere applicable, contraceptive coverage requirement may be delayed until policy years beginning on or after Aug 1, 2013 for qualifying institutions
Applicability conditionsApplies to non‑profit institutions of higher education meeting specified terms including notice and self‑certification
inv-32: Student health insurance coverage (written agreement form)
Written agreement requirementStudent health insurance coverage is provided pursuant to a written agreement between an institution of higher education (or acting body) and an issuer
Notice contentModel notice language (or substantially similar) may be used; must include dollar amount of annual limit, benefits affected, and advise potential eligibility under a parent's plan for under‑26 dependents
Display requirementsNotice must be prominently displayed in clear, conspicuous 14‑point bold type on the front of the policy/certificate and in plan summary materials
inv-33: Student administrative health fee (definition)
DefinitionStudent administrative health fee: periodic fee charged by the institution to offset campus clinic costs; defined in §147.145(c)(1)
UsageFee revenues support provision of health care through campus clinics regardless of student utilization or enrollment in student insurance
Regulatory referenceTerm cross‑referenced in §158.103 for Part 158 definitions and MLR rules
inv-34: Student market
Market definitionStudent market: the market for student health insurance coverage, treated as a distinct pool for certain MLR calculations and credibility adjustments
AggregationStudent coverage experience reported and aggregated nationally as its own pool under §158.120 amendments
Estimated sizeEstimated affected enrollees roughly 1.1–1.5 million (CMS estimates across student market) based on accounting tables
inv-35: impermissible material relationship (reference)
Removed rule referenceThe Commission removes the impermissible material relationship rule at 47 CFR 1.2110(b)(3)(iv)(A)
Conforming editsRemaining paragraphs redesignated and related Part 1 rules conformed to remove references to the impermissible material relationship
ContextChange implemented to conform Part 1 to court mandate (Council Tree Communications decision)
inv-36: unjust enrichment payment schedule
Unjust enrichment period reinstatedReinstates prior five‑year unjust enrichment payment schedule by removing the ten‑year extension in 47 CFR 1.2111(d)(2)
ReasonChange made pursuant to Court of Appeals mandate that prior modifications lacked adequate notice and comment
Conforming amendmentsOther Part 1 rules conformed as necessary to reflect removal/reinstatement actions