Administration lays out annual dollar limits on student health care plans

WASHINGTON—Colleges and universities offering health care coverage to students through the end of 2013 will be able to provide lower annual dollar limits in plans than other organizations, the Centers for Medicare and Medicaid Services said.

In its final rule, released Friday, CMS said student health insurance policies must provide annual coverage limits for essential benefits of at least $500,000 for policy years beginning on or after Sept. 23, 2012, but before Jan. 1, 2014.

For plan years that begin on or after Jan. 1, 2012, but before Sept. 23, 2012, the final rule, like one proposed last year, requires student plans to have an annual limit of at least $100,000.

Last year, CMS proposed that student plans for plan years starting on or after Sept. 23, 2012, have an annual limit of $2 million, the same as other group plans.

But in its final rule, CMS said a $500,000 limit will provide a “more gradual transition” to full compliance with the health care reform law while protecting students from catastrophic claims “except in extreme cases.”

Beginning Jan. 1, 2014, health care plans, including student plans, cannot have annual dollar limits.

Certain other plans, most notably “mini-med” plans, which typically are offered to low-paid temporary employees, were earlier exempted from the annual limit rules through the end of 2013 if they can meet certain requirements. More than 1,500 mini-med plan sponsors have received such waivers.