Schools Dropping Health Insurance?

[SocraticProf]

Short Version: On Friday, the University of Missouri cancelled the health insurance that it provided to graduate students. It did so because of an IRS interpretation of part of the Affordable Care Act. I'll go into more detail below, but I'm wondering if this is a widespread issue. Is this happening at other schools? How was it handled? How are students responding? And, if you are a member of a graduate student union, is being in a union producing better outcomes as it relates to this issue?

Longer Version: So, what happened? At the University of Missouri, students with assistantships and fellowships could receive free health insurance (for a particular plan, the university paid the premiums). Roughly 70% of graduate students took advantage of this program. However, around 10:30 am Friday, graduate students received a mass email stating that the IRS "prohibits businesses from providing employees subsidies specifically for the purpose of purchasing health insurance from individual market plans" and that the IRS considers the university's Aetna health insurance an "individual market plan". Reportedly, if the university did nothing, it could be fined $100 per day per student whose health insurance was being subsidized. 

MU claims to have first been aware of the issue on July 21st, but they did not notify students of any issue until August 14th, when it notified students that it would not be providing subsidies. That notice came 13 hours before the existing health insurance plans expired. Now 1000s of graduate students and their families are without health insurance. MU does plan to give every graduate assistant/fellow a one-time fellowship to help offset costs. The fellowship amount varies based on FTE and status as domestic or international., But, those fellowships cover less than 50% of the cost of buying the previous insurance out of pocket.

Here is MU's FAQ page on the issue: http://gradstudies.missouri.edu/about/news-events/news-features/2015/information-about-student-health-insurance/

Here is a local article: http://www.columbiatribune.com/news/education/mu-graduate-student-employees-lose-health-insurance-subsidy/article_28a9170a-ac0a-550e-9565-58345d6477bd.html

Is the experience similar elsewhere? 

[ProfLorax]

Holy crap. This hasn't happened at University of Maryland, I think because grad students are offered the same plans/subsidies as staff and faculty. I am so so sorry about this. Is there any organizing happening? How can students at other institutions show solidarity with the grad students at Mizzou?

Edited August 16, 2015 by ProfLorax

[SocraticProf]

Hi ProfLorax,

I'm glad to hear that this isn't happening at Maryland, and I think your reasoning is correct. The university only offers its employee health insurance to full-time employees and they ensure that graduate students do not exceed .7 FTE. So, graduate students are not eligible for that benefit. 

As for organizing, classes do not start until the 24th, so student governments and organizations will not have any regular meetings until after that date. But, there is an open forum that has been scheduled for tomorrow for students to learn what happened, and where we go from here as a student body. 

In terms of help, I wish I knew, but here are some suggestions:

• Make sure your graduate student governments or union know what happened to us so they can make sure it doesn't happen to you.
• Share information with us. The best response that we can make to our administration is one that points to what other institutions are doing and the solutions they have to this problem. 
• Visibility can't hurt. If we can find ways to get our story out, then there is a chance that groups that can help us can find us. 

It's a start at least. 

 

[TakeruK]

Holy crap that is terrible. At my school, students are explicitly considered non-employees and our health insurance is subsidized (and got better this year compared to last year). The big affordable care act change that happened here was that dependents of students (spouses, children) were on a different plan that had higher rates. The ACA now prohibits schools from offering different plans (at different rates) to students vs. dependents so now families pay way less in health premiums.

I think your student government really needs to push your school on this. To me, it sounds like the best way for your school (and the best for your students) is to get the school to switch away from a plan that is considered an "individual" plan. Good luck!

[dr. t]

I've not heard about this at any institution, private or public, including my own. I was offered exactly this sort of subsidy as part of my package at OSU. A $36,000 fine is peanuts to a university that's already spending $3.1 million on health insurance. This sounds like a load of nonsense. I suspect someone's playing politics.

Edited August 17, 2015 by telkanuru

[TakeruK]

Oh I missed the second request for help, which was "share your info with us". I'm sending you a PM with the details of the current plan at my school right now, if that helps!

[SocraticProf]

Hi telkanuru and TakeruK,

I think the $36,000 number wasn't accurately reported. If it's true that the IRS will levy a $100 fine per student per day, then that is $36,000 per student. And thanks for letting me know that OSU is still offering a similar plan. (Can you tell me which OSU?)

I've spoken to someone I know at Bama, and been told that their subsidies are no longer being offered for the same reasons. However, they alerted students of the changes in July, the stipend is for a larger percentage of cost for the single-coverage premium, and they may offer a similar stipend in the spring. 

[dr. t]

It was OSU's main campus - you should double check on the details, as I didn't take the offer. I can tell you that Brown offers a $700 subsidy to any graduate student that doesn't take Brown health insurance (which is 100% covered by the university).

[rising_star]

This seems unusual to me. UNC, for example, still seems to offer coverage for TAs, though there's a contribution: https://campushealth.unc.edu/charges-insurance/student-blue-ra-ta-and-postdoc-insurance . The state institutions in Arizona are unable to drop coverage for grad student employees working as a TA or RA, or at least that's what I was told years ago (something about a legislative mandate at the state level that they provide such coverage). 

That said, I've heard that VCU (Virginia Commonwealth University in Richmond) did something similar by dropping their coverage/payment for health insurance for RAs and then forcing them to buy it on the healthcare exchange instead... Can't recall all the specifics though. 

[Eigen]

Cross-posting the same thread from the CHE forums here:

http://chronicle.com/forums/index.php/topic,187423.msg3385127/topicseen.html#new

I've put in some of my experiences there, and we've definitely had to deal with issues where our state and the IRS differ in our employment status (state doesn't recognize graduate assistants as employees, IRS does). 

Feel free to PM me for more information, I've been the one at the negotiating table with the University and carriers the last couple of rounds at my school and might have some suggestions.

[mandarin.orange]

This spring, UC Berkeley similarly notified grads they were dropping dependent insurance. Unlike the MU case, this affects only 0.9% of the student body, but seems yet another hurdle in grad school to those with children, families, close family members with chronic illness. The UC system's union has been involved, and it's been widely covered in local news and media. I believe there is a one-year financial assistance program for affected grads. One article about it is here and unfortunately I have not seen (or closely followed the story) for any updates since June. 

Edited August 18, 2015 by mandarin.orange

[SocraticProf]

Hi rising_star, Eigen, and mandarin.orange, 

Thank you for the advice. I heard about what was happening at Berkeley. I believe students there are unionized, so it will be interesting to see if that does anything to improve outcomes. 

And I'll have to look into things at Arizona to see if we should lobby at the state level. 

Here's a general update, yesterday there was a grad student open forum. 400-500 students filled an auditorium to the point that people lined the aisles and were standing in the hallway. From what was stated, IRS Notice 2013-54 is what prevents employers from subsidizing individual plans. The Department of Health and Human Services defines the student health insurance that we have as an individual plan and not a group plan. I suppose other schools may have plans that count as group plans. 

If you want to talk to your student governments about the possibility of this happening at your school, it's the IRS Notice and HHS definition that matters. 

Other schools that have taken similar actions include University of Missouri St. Louis, Bama, LSU, Auburn, and ?North Texas?. However, at least Bama and UMSL notified their student in July of the coming changes. (It's funny that Mizzou, which is trying to hold onto AAU standing, seems to be the only AAU school doing this)

In terms of long term options: the current plans for domestic .5 FTE plans cost the university about $3,000 a year per student. But, the employee plan would reportedly cost about 9,000 a year, and graduate students would have to pay a monthly fee (though I bet the coverage is better). So, moving grad students to the employee plan seems prohibitively expensive. 

While upping stipends to compensate seems doable, it was noted that future increases in premiums would likely quickly outpace future increases in those stipends.

In terms of current action: Students are being encouraged to use the hashtag #GradInsurance, post their stories on YouTube, and do general lobbying at all levels. Someone even started a whitehouse.gov petition for the IRS to make an exception as regards Notice 2013-54 (in which case, benefits can go back to how they were): http://tinyurl.com/ntl3bwq.

And, there is talk of a walkout next week (first week of classes). I'll let you know if it happens. 

[ProfLorax]

Hey SocraticProf,

I'm in the process of contacting some of the professional organizations in my field and calling them to formally respond to this. Is there a way to find out what percentage of English 1000 teachers are grad students? I ask because I study composition, and I think I can get some of the major players in our field to agree this is a composition issue, as grad students are a major part of the composition work force.

Thanks, and good luck. Keep us posted. 

[ProfLorax]

I just posted this to my facebook wall with a link to the article:

This infuriates me.

The University of Missouri has eliminated all subsidies for grad student workers' health care plans. What many folks don't realize is grad student workers ARE workers. We teach the classes, run the labs, work the offices: as my friend Yvonne said, the university works because we do. And since we work (many of us have the same teaching loads as faculty), we cannot pursue full-time jobs outside of universities; therefore, we depend on our universities, the same institutions to which we devote our time and efforts, to ensure affordable health care.

This is a composition issue, as grad student workers are a significant portion of the composition teaching force. This is a disability issue and a class issue, as students with disabilities and working class students need access to affordable health care in order to continue their studies. This is a labor issue, as we are workers who are not treated as workers.

The Missouri admin is blaming the Affordable Health Care Act for their callous and abrupt cancelation of benefits, but many universities, like my own, don't have this problem. At the University of Maryland, we have access to the staff and faculty health plans. So there are other models, there are solutions that don't leave grad student workers in the cold with FOURTEEN HOURS NOTICE.

How do we support our fellow grad student workers at Missouri? And how do we make sure that other universities don't follow suit?

[Horb]

I'm hoping mine doesn't do this, but in my acceptance letter, it states we get free health care, so if they pull this, I guess we could get legal help and fight it. 

[ERR_Alpha]

This seems so bizarre to me. Penn State uses Aetna also- it must be some lingo about our plans not counting as individual but as group plans. I think it's because Aetna comes up with a package just for Penn State Graduate Students- it's not some other plan we simply buy in to. I don't understand how some schools are having this issue and others aren't, I really think it's just a lack of foresight on the institution's part. Best of luck.

Edit: Did your school give you actual money for you to buy the plan yourself? Ours 'subsidizes' it, but we never actually see the money. We opt in to the health plan, and we pay our portion monthly (I believe its 20%).

Edited August 21, 2015 by ERR_Alpha

[SocraticProf]

Hi all,

ProfLorax, I've asked someone in English about what percentage of 1000 level courses are taught by graduate students. I'll let you know if I get a response.

Horb, at the open forum, someone suggested that we go to small claims court if our total damages are under $5,000. However, the opinion of the university seems to be that making good on the contracts that guarantee health care would violate federal law and therefore they are not enforceable. 

ERR_Alpha, we never see any money. It just gets automatically taken off our bills. Though, we don't pay any monthly premium. 

 

Quick Update

First, a walkout has been planned for Wednesday, all day. This is scheduled to include a meeting at Mizzou's iconic columns and a march to the chancellor's house. However, there has been a development and the status of the plan to walkout is now uncertain. 

The development is that administrators have just released a statement indicating that "MU will defer implementation of its decision regarding graduate student health insurance. As a result, the university will pay for health insurance for eligible graduate students." The complete statement is here: http://chancellor.missouri.edu/news/response-to-graduate-student-demands-and-update-on-health-insurance/

How this impacts the walkout, how acceptable this is as a response, and its details (won't the school be fined $36,000 per student?) have yet to be determined. 

[TakeruK]

Thanks for continuing to update us. I am sure this is helpful information for other students who might be facing similar situations. I think the latest development at MU sounds like a good one as it at least means you do not have to pay anything right now while both sides sort it out. Hopefully other schools will go this route (vs. having students pay now and then getting reimbursed or refunded later if it works out).

[mandarin.orange]

Thanks for these timely and clear posts, SocraticProf! This is my go-to thread now for updates; not much activity lately on that CHE thread, and twitter of course informative but fragmented. 

Student-workers are indeed unionized at UC Berkeley, but I have no idea how organized/effective their current leadership may be (varies WIDELY between UCs). If the broader UC-wide union picks up this issue, they could be very effective. I haven't heard anything on that yet. 

[xolo]

I'm pretty sure the reason Berkeley (and some other schools) have dropped dependent health coverage is because of ACA (obamacare). If insurance is available for dependents through the employer at any price then there is no access to government subsidies via obamacare and the exchanges, one must pay the employer provided (full) price. This is a smart, pro-student move on the part of Berkeley because it gives students the ability to access health insurance for dependents using obamacare and the exchanges, which will be heavily subsidized at TA salaries, depending on the personal details of each applicant.

 

[TakeruK]

I'm pretty sure the reason Berkeley (and some other schools) have dropped dependent health coverage is because of ACA (obamacare). If insurance is available for dependents through the employer at any price then there is no access to government subsidies via obamacare and the exchanges, one must pay the employer provided (full) price. This is a smart, pro-student move on the part of Berkeley because it gives students the ability to access health insurance for dependents using obamacare and the exchanges, which will be heavily subsidized at TA salaries, depending on the personal details of each applicant.

To clarify, if insurance is available for dependents at a subsidized rate, then there is no access to government subsidies via Obamacare and the Exchanges (not just simply "available"). My spouse was on a ACA plan when my school offered a dependent health plan at a very high price ($7000+ per year). Currently, the latest ACA rules require schools to offer dependent rates at the same rate as the unsubsidized student plan ($2600-ish, per year) so this is the most pro-student move possible, because it ensures an affordable option for dependents without requiring any dependent to take the plan (i.e. they still have the exchange plan option if they desire or if it is more beneficial).

In addition, since $2600/year is about 10% of our income and about half of our students are international which means dependents cannot work, $2600/year isn't actually affordable for some students. In these cases, the school offers a special benefit of $100/dependent/month. However, they are careful to word and advertise this as a general "special needs" award instead of a "health insurance subsidy" to avoid what you wrote here. So I think this is another way schools can act carefully and deliberately in their students' best interests.

[xolo]

I don't believe any of your scenarios apply to Berkeley (that was my response, this specific school was mentioned, but I think this might apply to UC in general). If I remember correctly (maybe I'm wrong) the student health care is about $3,000 per year at Berkeley and is provided free (not really free, but paid for by the respective departments) to funded PhD students. Dependents were offered this same $3,000 per year coverage, but paid for by the student. Thus, no access to obamacare, right?

At a TA salary, the obamacare subsidies will generally reduce the cost of health care for, say, a family of 4. (ie, the cost will be significantly less than $9,000/year for those 3 dependents). That's why Berkeley eliminated the option to insure dependents. Of course, they could have offered special $100/month or about $1,000/year as you mention for your school. (I assume you are not at a UC as this sounds like too good a deal, but I don't know). For a family of 4 (my example) that $3,000/year you cite is probably going to be very roughly the same as the cost after obamacare credits, depending on individual factors.

So why should UC heavily subsidize dependents when the federal government already offers that via obamacare? 

Edited August 29, 2015 by eyepod

[EdNeuroGrl]

Because they would rather you switch to Obamacare?

You're also quite lucky to get something offered through your university. Unless you are a full-time employee (assistantships are a gray area) UNM sends students straight to get medicaid.

[TakeruK]

I don't believe any of your scenarios apply to Berkeley (that was my response, this specific school was mentioned, but I think this might apply to UC in general). If I remember correctly (maybe I'm wrong) the student health care is about $3,000 per year at Berkeley and is provided free (not really free, but paid for by the respective departments) to funded PhD students. Dependents were offered this same $3,000 per year coverage, but paid for by the student. Thus, no access to obamacare, right?

At a TA salary, the obamacare subsidies will generally reduce the cost of health care for, say, a family of 4. (ie, the cost will be significantly less than $9,000/year for those 3 dependents). That's why Berkeley eliminated the option to insure dependents. Of course, they could have offered special $100/month or about $1,000/year as you mention for your school. (I assume you are not at a UC as this sounds like too good a deal, but I don't know). For a family of 4 (my example) that $3,000/year you cite is probably going to be very roughly the same as the cost after obamacare credits, depending on individual factors.

So why should UC heavily subsidize dependents when the federal government already offers that via obamacare? 

No, I'm not at a UC school. Your first paragraph sounds very similar to what my school is doing. When I had my spouse on my student plan as a dependent, it was charged through my student account, so I am the one financially responsible for it. However, my spouse was still eligible for ACA plans because the school was not contributing any money towards this plan at all (**in our first year here, ACA was not yet available and due to pre-existing conditions, was not eligible for private plans--the school recommends spouses get a private plan due to the high cost, but keeps the expensive plan as a last resort due to the ability of insurers to reject applicants in the past; also our international visa status requires a certain amount of insurance, so the school must provide an option). In our later years, my spouse was eligible for ACA plans even though this other option still existed. 

The school plan is also much cheaper than $2600/person for more than one person. But again, this is not because of the school contributing money towards the plan, but just due to the price negotiated by our school with the plan provider (e.g. it's a "bundle discount price"). I am a student representative for the faculty committee on student health and I know that each year, they make providers bid on plans that cover our needs. Because the plans are highly customized and not available as a general market plan (e.g. due to the stress of grad school, every student has access to 25 visits per year to a mental health professional for free, and then $15 copay per visit after that), this is why I think we would be "safe" from the IRS regulations mentioned in this thread.

You are right that the school (my school, the UCs, any school) should not have the sole responsibility of subsidizing dependent health care (or any care) because there are other agencies, such as the federal and state governments that do this too. This is a common line of reasoning our student government and our allied administrators have faced against the Faculty Board and other administrators. I agree that any additional support from our school should consider the current support available to our students. And so far, we have been successful with two lines of counter-argument:

1. The majority of the government subsidy available through Obamacare/ACA/marketplace plans are available to US residents/citizens only. Non-resident aliens cannot claim the portion of the subsidy that is available through our income tax return because it is only available for married couples filing together. IRS tax laws requires that married non-resident aliens file as "married, filing separately" which eliminates almost every tax break available. Since my school chooses to admit a lot of international students--on average, 45% of our graduate population is international, we argue that it is our school's responsibility to make sure we support the students we admit. It would be immoral for our school to knowingly admit students that have extra expenses and not provide adequate support.

2. The cost of living where we are is high and although our stipend tries to adjust for that, some populations of graduate students are still not able to make ends meet. It is just enough to support one adult, but almost impossible to support any dependents on a single graduate student's stipend (single parent graduate students have it the hardest, but international students' spouses generally cannot get work authorization either). So, our school targets populations of students in need and ensures that these students are not disadvantaged financially, so that they can be as productive as everyone else. Overall, the Dean of Graduate Studies here approves about $100,000 in extra funding for students here (we have about 1000 graduate students total). I suppose that the Dean could just split that $100,000 one-thousand ways evenly and give each student $100 per year extra. But this will have almost no effect (sure $100 is nice, but it's probably not going to make the difference on whether you are able to pay rent or not). Instead, they decide to split the $100,000 so that it goes to those who need it most. 

** Note: Not all of the $100,000 just goes to students with dependents, the Dean also helps out students (single or not) who have unexpected and expensive bills to pay such as hospitalization, needing to fly home for a parents' death, etc. 

[TakeruK]

Also just to clarify: as far as my school is concerned, when we/they say "spouse" or "married", they do not require legal marriage because we recognize that not all couples have always had equal access to marriage rights and/or might choose to make different decisions regarding marriage due to societal pressures, family pressures and personal choices. The school only cares about our legal marital status when we have to report it to an external group that cares.