Article by Stacey Freed
Like many independent boarding schools, Williston-Northampton School in Easthampton, Massachusetts, offers its boarding students a health insurance package that they can use while they’re at the school. Known as a “short-term limited duration plan,” it is good for 10 or 12 months.
Williston CFO Chuck McCullagh said his school offers it so that students can “have coverage and receive treatment here [in Massachusetts] without jumping through hoops.” In particular, McCullagh is referring to international students and those domestic students who may be on Medicaid (which is not portable across state lines) “or who may have insurance from a home state that puts limits on them receiving treatment in Massachusetts.”
But come year’s end, that health insurance safety net is going to be a little less stable because of a change in an Affordable Care Act regulation. The Centers for Medicare & Medicaid Services, otherwise known as CMS, a division of Health and Human Services, redefined short-term limited duration plans to be no more than three months in length and unable to be re-upped indefinitely. That means independent schools will no longer be able to offer a 10-month short-term limited duration option. (The 12-month option used mainly by international students is not at risk.) Plans already in place may not be good effective January 1, 2018.
In the absence of a better solution, it’s likely that Williston will offer three-month policies, which, McCullagh acknowledged, “will be cumbersome because they’ll have to be renewed.” And while offering a new and slightly different policy every three months fits the letter of the law, it’s not ideal.
Who Loses Out?
While there is no official statistic on the number of students nationwide who will be impacted by the change to short-term limited duration plans, McCullagh said that 17 of Williston’s 400 upper and middle school students will be affected.
Ford Allen, CEO of Clifford Allen Associates, based in Hilton Head, South Carolina, reports that the schools his company serves enroll more than 1,200 domestic students, approximately 50 percent of whom fall into the financial aid/Medicaid category. “The lack of coverage can result in the family -- and school -- having financial risk in the event of a student’s injury or illness,” Allen said. “In addition, the lack of coverage could make it difficult for the student to access the care they need.”
What to Do
Allen, whose company’s sole focus is to design, sell and service health insurance plans for students attending private secondary schools, has been pursuing solutions. So have NAIS’s Debra Wilson, general counsel, and Whitney Silverman, staff attorney.
Wilson and Silverman are trying to work on a legal resolution with CMS. “We were hoping they’d waive enforcement on this for a little while, but they weren’t game for that,” Wilson said. “And given the current administration, it’s hard to get regulatory bodies to do anything official. We’ve proposed language tweaks, but it’s virtually impossible to get the federal government to turn faster than it’s ready to do and that’s where we are right now. We’re kind of on hold.”
In addition, Allen has been working with United Healthcare Student Resources to create short-term solutions. In an email to his clients dated October 9, Allen suggested those schools send a letter to affected families that states, "We [the school] are now able to offer your child student insurance coverage for the balance of the 17/18 Academic year. This policy will be identical in benefit design to the existing policy and is once again offered through United Healthcare Student Resources." His email goes on to detail a timeline for how schools can access the January-to-June coverage option. (He was unavailable for comment at the time of this publication.)
The other potential solution Allen is working on, he said, is a “trust and captive model” that would enable up to 12 months of coverage for both international and domestic students. “In the absence of a regulatory solution,” Allen said, “this approach could help stabilize the offering of plans for students that attend private secondary schools.”
Stacey Freed is a frequent contributor to Net Assets.
