Can anyone make sense of this student health insurance disclaimer?

[pnwmom]

I'm trying to help a young woman figure out her options for health insurance, and the plan her community college offers has a disclaimer that I can't figure out at all. If there are minimum standards, then how can a plan be legally offered that doesn't meet them? Does Obamacare let student plans set low annual limits? Will that change in 2014?

This is what the disclaimer says:

Your student health insurance coverage, offered by United States Fire, may not meet the minimum standards required by the health care reform law for the restrictions on annual dollar limits. The annual dollar limits ensure that consumers have sufficient access to medical benefits throughout the annual term of the policy. Restrictions for annual dollar limits for group and individual health insurance coverage are $1.25 million for policy years before September 23, 2012; and $2 million for policy years beginning on or after September 23, 2012 but before January 1, 2014.

Restrictions for annual dollar limits for student health insurance coverage are $100,000 for policy years before September 23, 2012, and $500,000 for policy years beginning on or after September 23, 2012, but before January 1, 2014. Your student health insurance coverage put an annual limit of: $100,000 per injury or sickness.

[MineralMan]

1. I believe the end of annual limits doesn't start until 2014.

That would appear to match the dates in that disclaimer. But, it's still confusing.

[pnwmom]

3. The end, yes. But the annual limit is $2 million now, according to the govt. website.

The law restricts and phases out the annual dollar limits that all job-related plans, and individual health insurance plans issued after March 23, 2010, can put on most covered health benefits. Specifically, the law says that none of these plans can set an annual dollar limit lower than:

$750,000: for a plan year or policy year starting on or after September 23, 2010 but before September 23, 2011.
$1.25 million: for a plan year or policy year starting on or after September 23, 2011 but before September 23, 2012.
$2 million: for a plan year or policy year starting on or after September 23, 2012 but before January 1, 2014.

http://www.healthcare.gov/law/features/costs/limits/index.html

[ProgressiveProfessor]

2. Have you considered that the policy paperwork was written before

all the details were available. For that matter are the details in question published yet? (I have not been following that at all)

[pnwmom]

4. The plan was supposed to apply for this school year, and the details of the law have been known

since 2010.

This is what the govt. website says:

The law restricts and phases out the annual dollar limits that all job-related plans, and individual health insurance plans issued after March 23, 2010, can put on most covered health benefits. Specifically, the law says that none of these plans can set an annual dollar limit lower than:
$750,000: for a plan year or policy year starting on or after September 23, 2010 but before September 23, 2011.
$1.25 million: for a plan year or policy year starting on or after September 23, 2011 but before September 23, 2012.
$2 million: for a plan year or policy year starting on or after September 23, 2012 but before January 1, 2014.

http://www.healthcare.gov/law/features/costs/limits/index.html

[frazzled]

5. Maybe it means ...

They are imposing a "per injury or sickness" limit, not a total limit for the year (which, according to the schedule listed, should be $500,000 per year during this period from Sept 23, 2012 to January 1, 2014).

So, theoretically, a student could have 5 $100K illnesses per year. (Is this crazy?).

The main point is, for people who have working parents, it's probably better for a less-than-26-year-old to stay on their parents' insurance rather than take the student health plan. I realize that's not an option for everyone.

[pnwmom]

6. This young woman can't get insurance from her parents, unfortunately.

And this policy looks pretty lousy to me.

[frazzled]

9. I dunno if it's that bad

I assume the woman is fairly young: $500,000 annual cap with a $100K per illness/injury limit (these numbers will go up next year) sounds fairly safe, if it is not horribly expensive. It's probably better than what she can get at this moment on the open market (until the exchanges are up and running in a year).

But I'm no insurance maven. I'd talk to a professional.

[pnwmom]

10. One serious car accident could wipe out all that. It's the catastrophic things I'm worried about.

And the coverage costs about 2/3 of what regular individual policies (with full annual limits) do for someone her age. So it seems to me to be a poor value.

It bothers me that, with such ambiguous language, many of the students and their parents might be deceived into thinking this is a good policy.

[Yo_Mama]

15. I think it is a poor value also

The 100K per injury or illness is too little for this to be meaningful insurance.

I would suggest another policy. It would be better to have a higher deductible than such a low payout.

[NCTraveler]

7. I could be wrong.

But it looks like catastrophic coverage would have to be added to the students health care plan to make it meet the requirements of the health care law. The student plan is limited in it total payout over a year. I don't know what the implications of that are. Does it mean that without adding catastrophic coverage that the student will not meet the requirements to avoid the tax? I am not sure.

[TreasonousBastard]

8. I'm not sure, but it looks like...

it's talking about setting individual limits might break through the aggregate limits if too many students are enrolled in the program.

20 students at $100,000 = $2,000,000 total coverage and it's ok. 30 students break the bank at $3,000,000.

I know that makes little sense either, (only 20 students?) but that's just the basic idea and you have to know more about how the law works and the definitions they're working with.

[anonymousposter74]

11. the disclaimer is required by law

Because of the delay in issuing rules around Student Health Insurance Plans, colleges and universities are allowed to phase in the dollar limits to meet the requirements under the Health Care Reform law. The individual coverage limits will be enforced starting in 2014.

The American College Health Association has posted an FAQ on this phase in that may be of help http://www.acha.org/Topics/Affordable_Care_Act/Summary_of_FAQs_for_IndividualCoverageClassification.cfm

[pnwmom]

12. Thank you. And welcome to DU! n/t

[Yo_Mama]

13. 100K limit per cause

That's really very limited protection. If you got pneumonia or a broken leg, you'd be okay, but a bad car accident, a head injury, or a severe illness would run that out very quickly.

As to whether it meets the standards, that depends on when their policy year starts. See if you can find that elsewhere in the documentation, or ask the school. That's standard boilerplate probably written for multiple customers.

The odds are high that the policy year begins before Sept 23rd, so that it is legal. The problem is that not much protection is being offered.

[pnwmom]

14. That's what I thought, Yo_Mama.

What I'm most worried about is catastrophic coverage, and this policy doesn't go very far.

[Yo_Mama]

16. The ranks of the uninsured with insurance policies

keep growing. I don't think it's worth it. I bet a standard individual policy would be better.

Is the college getting kickbacks? This kind of pisses me off - a lot of young people don't even read these things, so won't understand what limited protection they have.

[pnwmom]

18. I'm looking into standard policies now. They are somewhat more expensive

Last edited Thu Jan 10, 2013, 05:41 PM - Edit history (1)

but the coverage is vastly better.

And if even I found the disclaimer confusing, how could we expect a typical 18 year old to understand it?

I'm also irritated that the college has a different policy for International students -- with no co-pays and a $500K annual limit. So why is the policy for International students so much better than for locals?

[Yo_Mama]

20. Probably because they are moneymakers and they won't settle for 100K limits

That really sucks.

[Fumesucker]

17. That last sentence is worded a bit oddly

The word "put" just seems out of place.

[pnwmom]

19. I noticed that, too. I also noticed that they have a much better policy

with no co-payments and a $500K annual limit, for International students only.