Alert / Employee Benefits
Good News for Student Health Insurance Under the ACA

It was the classic case of good intentions colliding with the regulatory freight train that is the Affordable Care Act (ACA), and the result was unhappy indeed.

Colleges and universities have long provided stipends or other credits or discounts to students who are also employees (mostly graduate students) to defray the cost of their student medical insurance. Then along came two-pronged guidance from federal authorities -- rules from Health and Human Services declaring that student health insurance is considered individual market coverage, and unrelated rules from the IRS effectively prohibiting employer subsidies toward the cost of individual health insurance - and wham!

Suddenly it appeared that the well-intentioned practice of defraying the cost of student health insurance was, dare we say, illegal. Hashtag: no good deed goes unpunished.

Earlier this year federal authorities acknowledged the regulatory glitch, and sensibly issued a free pass for these premium payment subsidies offered by higher education institutions, at least through the 2016 health plan or health insurance policy year.

Now the feds have extended that relief indefinitely. According to a recent FAQ, federal authorities will allow these health insurance stipends or credits to continue, until the issuance of further guidance.

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