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HHS: Student Health Is Different

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Regulators will ease some Patient Protection and Affordable Care Act (PPACA) rules for college and university student health plans, but they intend to subject the plans to the new minimum medical loss ratio (MLR) requirements by 2014.

Regulators also intend to make the issuers report student health performance on a calendar-year basis, rather than an academic year basis.

But insurers can report student health plan business on a national basis and separately from the results for other individual market coverage, officials at the Centers for Medicare & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services (HHS), say in a Student Health Insurance Coverage final rule.

The final rule, based on temporary regulations released in February 2011, is set to appear in the Federal Register Wednesday and take effect 30 days later. 

Most of the provisions, including regulations phasing in changes in rules on matters such as guaranteed renewability and annual benefits limits, would start to take effect July 1. The MLR reporting provisions would apply starting  Jan. 1, 2013.

CMS officials said PPACA limits their flexibility in some cases.

In the section on the minimum MLR rules, for example, officials acknowledge that some commenters have asked them to change for the federal MLR minimum for student plans.

Insurers, brokers and plan administrators told officials typical student health plan MLRs range from 65% to 82%.

PPACA now requires insurers to spend 85% of large group revenue on claims and quality improvement, and 80% of individual and small group revenue on claims and quality improvement.

“HHS does not have the authority to change the MLR percentage standard for plans,” officials say.

Instead of changing the MLR percentage permanently, HHS will let student plans multiply incurred claims and quality improvement activities costs by 1.15 in 2013, to give them one year of relief.

The transition should help student health plans compensate for unique characteristics of student health plans, such as high enrollee turnover, but it should spur them to become more efficient in other areas, such as marketing, officials say.

Another PPACA provision has required major medical plans to eliminate lifetime benefits limits and start phasing out annual benefits limits.

HHS will require student health plans to eliminate the limits by 2014, but it will slow the phase-in by letting plans hold annual benefit limits at $500,000 for policy years starting on or after Sept. 23, 2012, officials say.


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