In recent guidance, the U.S. Departments of Treasury, Labor , and Health and Human Services have extended transitional relief to colleges and universities that subsidize the cost of individual insurance premiums for student employees.

Under previously issued guidance, a health reimbursement arrangement or other program that pays some or all of the premium for individual health insurance coverage may violate the ACA’s prohibition against annual dollar limits and the ACA requirement to cover the full cost of certain recommended preventive care items and services. Many colleges and universities have historically reduced the cost of individual student health insurance coverage for graduate students (and sometimes other students) employed by the school. The new guidance confirms that these programs may run afoul of certain rules under the Affordable Care Act (ACA).

However, the guidance accounts for the fact that colleges and universities may not have realized that these arrangements violate these provisions of the ACA. To allow higher education institutions an opportunity to modify their programs, the Departments will refrain from enforcing the annual limit and preventive service rules against these student plans until the first plan or policy year that begins on or after January 1, 2017.

The new guidance reveals that colleges and universities face a number of unique situations under the Affordable Care Act. Please join us on March 2, 2016, for a webinar on Affordable Care Act issues affecting employers in higher education. The program is part of a series of programs that we are presenting on issues of particular interest to higher education institutions. For more information and to register, click here.

As the federal health care reform effort gained steam, Ballard Spahr attorneys established the Health Care Reform Initiative to monitor and analyze legislative developments. With federal health care reform now a reality, our attorneys are assisting health care entities and employers in understanding the relevant changes and planning for the future. They also have launched the Health Care Reform Dashboard, an online resource center for news and analysis on developments under the Affordable Care Act.