ACE, Associations Urge Permanent Solution to Graduate Student Health Insurance Issue
September 12, 2016

ACE and a group of seven higher education associations sent a letter (352 KB PDF) last week to three federal agency leaders urging them to find a permanent solution that will allow universities to continue providing subsidized health insurance plans (SHIPs) for their graduate students under the Affordable Care Act (ACA).

On Feb. 5, the departments of Treasury, Labor, and Health and Human Services issued guidance that this practice is not permitted under the ACA but provided temporary transition relief so that schools could continue providing this subsidized coverage without penalty through the 2016-17 academic year. 

According to the guidance, this practice is impermissible for students providing teaching, research, or other services to a university based on the agencies’ incorrect interpretation that such graduate students are employees under the common law definition of employment.

The associations' letter expresses appreciation for the temporary transition relief but explains the magnitude of the problem for thousands of graduate students and their institutions. The groups also emphasized the urgent need to resolve the issue because universities have already begun negotiating the terms and costs of their student health insurance coverage for the 2017-18 academic year.

The letter follows up on a similar one sent in June by Sen. Chuck Schumer (D-NY) and 16 other Democratic senators, advising swift action to resolve the issue.