Questions about the University of Missouri’s Graduate Student Health Insurance Problem

Late Friday afternoon, I learned from friends on Facebook that the University of Missouri just today (August 14) announced that because of a recent IRS ruling on a provision of the ACA, the university can no longer provide subsidies to some (most?) categories of graduate student employees that pay for their individual insurance policies. If you want to see the whole explanation, you can read it here.

Based on the thumbnail in this message from the Graduate School, and what I know about other IRS rulings about ACA provisions that have caused serious problems for employees of various statuses/kinds, I’m perfectly willing to believe that the university is compliant with the law. Even though I support the law generally, I recognize that the labyrinth it constructs is likely to have dark corners like this one.

However, I have some questions that, if I were a faculty member or graduate student leader at Missouri, I’d be asking of upper administration and pronto.

  1. According to the letter, the university learned of the ruling on July 21. They didn’t announce it to the people who actually needed to know for three and a half weeks. Why not? Certainly, they needed to do some research, investigate their options, figure out how to comply, and so on. But dropping this bomb on thousands of their students less than two weeks before a new semester starts is, well, unkind (to put it mildly).
  2. The letter does not explain how they learned of the ruling. That seems important to know. Did the IRS call them? Did they call the IRS? Is there documentation anywhere? Especially if they were concerned about this even before July 21, they could have offered some kind of warning. And if they knew nothing at all about it, they might have responded somewhat differently (more on that later).
  3. According to the letter, the university contacted other graduate schools facing the same problem and consulted with them. Which ones? And did everybody decide on the same course of action? I have to say, and I don’t mean this to be self-aggrandizing, that I’ve got my ears/eyes in enough social networks that I’d be surprised not to have known about this elsewhere if it broke somewhere else first.
  4. The university has graciously (yes, that’s sarcasm) agreed to give every graduate student a “fellowship,” that is, a one-time cash payment that they can use towards a private insurance policy, or whatever. On legal grounds, I understand, the university cannot ask what the students are using it for, or recommend that they use it for insurance, or what have you. But it’s entirely fair to ask whether the dollar value of that fellowship matches what the university was subsidizing of the total cost of the insurance policies. I bet it’s not!

Those all strike me as fairly obvious questions that might help the graduate students and anybody who’s working with them to understand the situation more fully. But those aren’t all the questions. The last three are potentially more contentious, but I sincerely hope somebody can ask them and actually get honest answers.

First, according to the letter, as the university describes its heroic efforts to do right by the grad students, administration “reviewed the budget in order to find sufficient funds to offer alternatives to our students.” Um, if you were already paying for subsidies, then why would you have to look for money you’re no longer spending? Why not just give the subsidy money to the students and call it whatever you want to in order to make it distinct from the insurance payment? Actually, the answer to that is probably something along the lines of, “Since we can’t have anything to do with paying for insurance, we can’t know who would have used the money for our insurance and who wouldn’t. So there may be a lot more students getting ‘fellowships’ than there were getting subsidies.” If that’s the case, say so.

Second, anybody who’s been following ACA implementation over the last five years knows that there have been exemptions, delays, waivers, etc granted left and right. Did anybody in university administration say to the IRS, “Wait a minute. We have thousands of graduate students who will find this decision devastating. Can we have one year to figure out what our options are that won’t put thousands of people’s finances at risk?”

Third, along similar lines, has it occurred to anybody at the university to talk to the insurance carrier about negotiating a new kind of policy that doesn’t run afoul of this ACA provision? Or negotiate with another carrier? The administration may well be right that other universities have run up against this problem, but clearly lots of them haven’t. What kinds of insurance policies do the safe ones have, and why doesn’t Mizzou try to get one like that?

Unfortunately, I don’t work at the university or for any organization that might encourage their administrators to answer me. If anybody at Mizzou happens to see this and thinks there’s anything useful here, feel free to steal, tweak, what have you.

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