KU taking away health insurance subsidy for graduate students in response to federal ruling
The University of Kansas is taking away health insurance subsidies for graduate student employees, the students learned this week.
Because of a recent federal ruling, as of next summer KU will no longer be allowed to offer a subsidy for health plans, according to an email message sent to graduate students on Wednesday.
The benefit has been available to graduate teaching assistants, graduate research assistants and graduate assistants who work an average of 20 hours a week, KU human resources director Ola Faucher said Thursday.
Graduate students can still enroll in the Kansas Board of Regents graduate student health insurance plan, but beginning Aug. 1, 2017, they will no longer receive a health insurance premium subsidy from KU, Faucher said. Currently for each graduate student enrolled in the KBOR health plan, KU pays $435 per semester and students pay $145 per semester toward premiums, she said.
Graduate students can still get insurance — either through the same student insurance plan offered to undergraduates or through the Affordable Care Act Healthcare Marketplace — but the university will not help pay for their premiums.
“This is a matter of federal law with which we have to comply; it’s not something that we would choose to do,” Faucher said. “There are national organizations that are doing their best to try and get this overturned. Naturally KU is supportive of that effort, because we value our graduate student employees and feel that this is a detriment to our graduate program here at KU.”
More than 6,100 graduate students are enrolled at KU’s Lawrence and Edwards campuses this semester, according to university data.
While numbers vary from semester to semester, in May 2016 about 1,550 of those students were eligible for health insurance subsidies and 1,048 were enrolled, said Madi Vannaman, KU’s associate director of human resources for benefit.
The change also will apply to graduate students at KU Medical Center, she said.
At KU, graduate student employees are represented by a labor union and have been for over a decade, Faucher said.
For years many colleges, particularly large research institutions, have provided graduate students with Student Health Insurance Plan coverage at little or no cost, because of their status as students enrolled in an academic program, according to a statement from the American Council on Education, which KU shared with graduate students.
In February, the U.S. departments of Treasury, Labor and Health and Human Services issued guidance that such a practice is not allowed under the Affordable Care Act, but gave schools until the end of the 2016-17 academic year to change their benefits, according to the ACE statement. It says schools could be fined $100 per day per student if they continue providing the coverage.
The ACE notes that the guidance is based on an IRS notice intended to prevent employers from eluding the Affordable Care Act’s employer mandate by giving money to employees, though a number of national academic organizations dispute that application.
“The guidance is based on an incorrect interpretation of employment law that graduate students are employees,” the ACE said. “As a result, the guidance concludes that the subsidized student health insurance coverage is a kind of impermissible ‘premium reduction arrangement’ as part of an ’employer payment plan.'”
In summer of 2015 the University of Missouri’s announcement that it planned to cut graduate students’ health insurance subsidies — citing the same federal ruling — sparked protests that, combined with race protests, led to the ouster of the school’s president and hurled the university into national news.
“They just jumped much more quickly,” Faucher said of Mizzou. “The state of Kansas decided we wanted to take more time to determine the best alternative for us.”
KU plans informational sessions for graduate students in the coming weeks.
“KU has appointed a work group to discuss an alternative approved by the Chancellor and other Presidents of the KBOR state universities to support the needs of our graduate student employees and quickly ensure they have the information they need to make appropriate health insurance decisions,” KU’s letter to graduate students said. “Our goal is to have more definitive information available in advance of health insurance open enrollment periods since the existing subsidy lapses on July 31, 2017.”
Several graduate student leaders at KU did not respond to messages seeking comment Thursday.