Graduate students employed by the University of Missouri will have a harder time paying for health insurance after MU told students Friday it is taking away subsidies that help with premium costs.
MU Associate Vice Chancellor for Graduate Studies Leona Rubin said the change is the result of a recent IRS interpretation of a section of the Affordable Care Act. The law, which requires adults to have health insurance or face tax penalties, “prohibits businesses from providing employees subsidies specifically for the purpose of purchasing health insurance from individual market plans,” the university said in a letter sent to students Friday.
The IRS, Rubin said, considers the university’s student health insurance plan from Aetna an “individual market plan.” Because of the IRS classification, the university cannot give graduate students with assistantships a subsidy to help with health insurance costs, Rubin said.
If the university continued to do so, Rubin said it could be fined $36,000.
“We’re trying to comply with the interpretation of federal law,” Rubin said. “We’re not trying to hurt” students.
MU is using the $3.1 million it had budgeted for graduate student employee health insurance subsidies to create one-time fellowships for those employees. All graduate students with qualifying titles — a group that includes teaching assistantships, research assistantships and fellowships — will be eligible for the one-time fellowship this fall.
“We wanted to make sure the students who needed insurance had the money ... in the fall,” Rubin said.
In the spring, those students will have to pay completely out of pocket for health insurance....I am told that the graduate students were given less than 24 hours notice of this change.
Suffice it to say this is an interesting and probably not desired outcome of the Affordable Care Act and one of the reasons that I am, in general, pretty skeptical of most federal legislative efforts. It's rare that anyone can accurately predict second- or third-order effects and it always seems like there will be small (or big) groups of people who are negatively affected by these massive legal and regulatory shifts.
I can't imagine that Mizzou chemistry grad students make much; I suspect this won't help their recruiting for the following year. (I suspect that they will be planning to increase their stipends for the following year?) Best wishes to the affected Mizzou students.
Below the jump, the text of the actual e-mail sent from Professor Rubin (formatting, etc. removed):
Due to changes in federal regulations, the University of Missouri no longer will be allowed to provide subsidies for graduate student health insurance. The Affordable Care Act prohibits businesses from providing subsidies to employees specifically for the purpose of purchasing health insurance from “individual market plans”. Our Student Health Insurance Plan from Aetna is considered an “individual market plan” and graduate TAs and RAs are classified as employees by the Internal Revenue Service (IRS). The IRS has ruled that institutions of higher education are employers subject to this ruling and as such cannot provide subsidies to their employees, in our case, graduate students. We hope the IRS will change its position on this issue in the future, specifically for students and institutions of higher education and several advocacy organizations are working on this effort. However, because the fines for providing subsidies are significant, until such changes occur, and consistent with the approaches of other academic institutions, we must discontinue providing this subsidy to all graduate student employees.
Because we recognize that this is short notice, a one-time fellowship will be provided for graduate student employees in qualifying titles (4717 Graduate Teaching Assistant, 4715 Graduate Research Assistant, 4685 Graduate Instructor, 4690 Graduate Library Assistant, 4680 Graduate Fellow) based on your FTE, and deposited into your MyZOU account. This additional stipend will not impact your current stipend or fellowship from other departmental or campus sources but is in addition to those monies. The fellowship stipend will be taxable, similar to other assistantship or fellowship compensation according to IRS rules. The cashier’s office is aware of this issue and will work with you to avoid any late charges or fees associated with this policy if you have already enrolled in the insurance and wish to change your enrollment or withdraw. [Staff member name redacted] in the Office of Graduate Studies will work with you on any transition plans. We regret this last-minute adjustment but hope the added Fellowship amount assists you as you start your graduate education at MU.
As a student, you may continue to purchase insurance through the Aetna Student Health Insurance Plan (https://www.aetnastudenthealth.com/students/student-connection.aspx?GroupID=890430), through another source or from the ACA Exchange/Marketplace (https://www.healthcare.gov/). Open enrollment for the ACA Exchange begins in November 2015. However special enrollment is possible if you declare that you have lost coverage. Assistance with deciding on ACA Plan options is available at https://www.healthcare.gov/glossary/navigator/. Click on “find local help,” enter Columbia, MO and you’ll get the list of available providers. The assistance is free.
The Aetna Student Health Insurance Plan allows you to access the primary care services of the Student Health Center on campus (http://studenthealth.missouri.edu/index.html), as well as access to specialty care providers. The Student Health Center is a participating provider for the Aetna Student Health Insurance Plan but accepts insurance for many other plans as well (http://studenthealth.missouri.edu/needtoknow/healthfee.html). The Student Health Service fee ($100) will continue to be assessed as part of the student fee charges for students registered for 6 or more credits hours.