University of Missouri Grad Students Received 14 Hours Notice on Health Insurance Cancellation

When I went to grad school a decade ago, I received health insurance as part of my tuition and benefits package. It wasn’t the world’s best health insurance — when I fell down a flight of stairs, broke my big toe in three places, and needed foot surgery, I spent months paying off the out-of-pocket cost in installments — but it was a very good thing to have.

I went to grad school at Illinois State, and back when I was applying to grad schools I also sent in an application to the University of Missouri (aka “Mizzou”). Well, Mizzou just announced that it was changing its health insurance program, giving grad students 14 hours notice to find other coverage.

From Missouri public radio station KBIA:

On Friday, many University of Missouri graduate students found out via email they would no longer receive help from the university to pay for their health insurance.

[…]

Graduate students received this news little more than 14 hours before graduate student health insurance coverage lapsed. This decision affects graduate students from every department who work for MU as teaching assistants, research assistants and library assistants.

Notice that KBIA used the phrase “help from the university to pay for their health insurance” rather than “health insurance.” That’s the big problem here. Mizzou explains this in a Q&A recently posted to their Graduate Studies website:

Due to changes in federal policy and IRS interpretation of that policy, general counsel has informed us that the University of Missouri no longer is allowed to pay for graduate students’ health insurance. (Previously, the university provided a subsidy to those students who opted in for insurance and were paid from a qualifying assistantship or fellowship). The IRS considers our student health insurance plan an “individual-market plan” rather than an “employer-sponsored plan,” such as our health plans for MU employees.

The Affordable Care Act prevents employers from giving employees money specifically so they can buy health insurance on the individual market. Graduate teaching and research assistants are classified as employees by the IRS, so they fall under this ruling.

The university is going to do its part to get around the federal policy:

Based on these reviews, we have decided to allocate one-time fellowships to all graduate student employees in qualifying HR titles. We will calculate the amount of the fellowships based on how many hours students work per week. These fellowships will be in addition to the stipends students receive from their academic units for work.

Because we are prohibited by law from linking this money to health insurance in any way, we are unable to ask students whether they need health insurance or plan to purchase insurance.

One of the Q&A questions is, of course, the obvious one: why not just treat grad student employees the same as other employees and give them employee health insurance?

Employee health insurance plans are only available to full-time, benefit-eligible employees. Part-time employees, regardless of whether they are students, are not eligible to purchase this benefit.

Well, there you go. You aren’t eligible for employee health insurance because you are a part-time employee, but you can’t receive a health insurance stipend because you are a part-time employee.

But hey, some grad students are going to receive fellowships! Which they can spend on health insurance, or maybe on food or rent. We can’t legally tell you what to do with this money, or ask whether you used it on health insurance.

I bet some grad students are going to be very tempted to not use the fellowship on health insurance, because the fellowship is $1,240 per semester for a student working half-time and $620 for a student working quarter-time, and the fine for not having health insurance is only $325.

There’s also the question of what grad students are going to do between now, when their insurance is expired, and when the fellowships arrive. KBIA shares the story of PhD candidate Jennifer McKinney Wilson, who is likely to give birth during her lapse in coverage:

“When we found out on Friday that we lost our insurance, I was 22 days away from my delivery date,” McKinney Wilson said.

Now she says she is 19 days away, already in labor, and has had no health insurance since Friday.

“Being a graduate student has always been a little difficult and challenging,” Mckinney Wilson said. “I mean you have to make sacrifices to be here. Most of us took cuts in pay and things to come here. So up until today there were sacrifices, but they were doable. And now it doesn’t seem so doable.”

Is it possible for someone like McKinney Wilson to hop onto HealthCare.gov, fill out the forms, and get health insurance before her child is born? I went to HealthCare.gov to check it out, and it looks like “becoming pregnant” does not count as a qualifying life event for Special Enrollment, although “giving birth” does.

On the plus side, “losing your health insurance” does count as a Special Enrollment event. I wonder if that means “losing your health insurance stipend,” too.

This story is part of our College Month series.

Photo credit: Adam Procter

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