The last few years have been a struggle for Jennifer McKinney, a fifth-year graduate student in sociology at the University of Missouri at Columbia. Missouri provided her a stipend of around $11,000 for the academic year, an amount at the low end nationally for doctoral financial support. She works an extra job to pay the bills, but says she has still racked up about $130,000 in student loans.
Despite the stress and financial burden of earning a Ph.D., it wasn’t until Friday that Ms. McKinney, who is expecting to go into labor in less than three weeks, questioned her decision to earn a Ph.D. The university announced then that, starting at midnight, it would no longer pay for graduate students’ health insurance, in order to comply with a provision of the Affordable Care Act.
"Now," Ms. McKinney said, "they are asking more than we can give."
The decision led to a revolt among graduate students on the campus. Several hundred of them gathered for a meeting on Monday and took to social media to denounce the move and what they said was the university’s failure to give them enough notice about it. They talked about organizing a walkout next week. By late Monday, the university’s chancellor, R. Bowen Loftin, issued a statement apologizing for what he called the "lack of appropriate notice and prior consultation." He announced the creation of a task force that will examine how to provide affordable health care to graduate students.
At issue is a provision of the Affordable Care Act, also known as Obamacare, that states that businesses can’t provide employees subsidies to buy health insurance from individual market plans. The Internal Revenue Service classifies graduate students as employees, and the U.S. Department of Health and Human Services classifies student health plans as individual market plans.
Here are answers to key questions raised by the University of Missouri controversy.
The Affordable Care Act went into effect last year. Why is this an issue now?
The IRS recently issued guidance stating that the method many universities use to provide health insurance to graduate students — student health-insurance plans — is not compliant with the Affordable Care Act, and that institutions could be fined up to $36,500 a year for every employee with a student plan.
The provision went into effect July 1, and university officials have been uneasy about how they should respond. The provision was initially viewed by many as applying to businesses, not universities. According to a statement from the Council of Graduate Schools, "The application of this ruling to universities has caused frustration and confusion among institutions that provide partial or full health-care subsidies to their graduate students."
What is the IRS’s concern?
The government is concerned about employers sidestepping Obamacare’s "employer mandate" — which requires businesses with more than 50 employees to offer health insurance to those working at least 30 hours a week — by giving employees money to buy health insurance on the individual market. The IRS, experts say, worries that universities may be doing the same with student health-insurance plans.
Steven Bloom, director of federal relations for the American Council on Education, however, says the insurance that universities provide to students shouldn’t be categorized as individual-market plans. "It functions almost like a group plan, like an employer plan," he says.
How many universities are dealing with this Affordable Care Act provision?
Mr. Bloom says that many universities provide student health-insurance plans, including the majority of flagship research universities. Not all colleges have such plans. Colleges that provide students the same health insurance as employees avoid this issue. So do colleges in which graduate students are unionized, for example, as the students are treated as a block, says Kristofferson Culmer, president of the National Association of Graduate-Professional Students, an advocacy group.
Mr. Culmer,who, incidentally, is a computer-science Ph.D. student at Missouri, says that unless the IRS changes its guidance, more universities in the weeks and months ahead will have to figure out how to respond to the provision.
Why are students upset with Missouri if this is an issue with the Affordable Care Act?
In addition to giving students just hours notice that they would no longer be insured, graduate students raised a litany of complaints in interviews with The Chronicle and on social media. One student, Michael Horton, asserted that the administration had demonstrated "a pattern of disrespect" toward his peers.
Students complained about low and stagnant stipend support that isn’t keeping pace with cost of living, poor housing prospects, and the recent elimination of an on-campus Student Parent Center that was heavily used by graduate students. Some students also said that while it’s true that the university is wading into murky waters, it could have responded differently. In fact, Mr. Loftin’s message to the campus acknowledged that "there may be other options available to us than the one announced last week that will serve you over the long term."
Some students also saw the university using the provision of the Affordable Care Act as an opportunity for cost savings. While Mr. Loftin noted that the $3.9 million the university spent last year subsidizing the health insurance of more than 3,000 graduate students would be spent on fellowships to partially offset graduate students’ health care costs this coming year, no such promises exist for the future.
How has the university responded to the concerns raised by students?
In addition to his apology, Mr. Loftin announced the creation of a task force that will be led by a dean and include other campus representatives, including four graduate-student leaders. Mr. Loftin said he expects the task force to provide him with options no later than the end of October. Many students, like Ms. McKinney, are left uninsured for now. Other students have signed up for individual-market plans.
Higher-education groups plan to lobby the federal government, asking it to clarify its guidance in order to reassure universities that they won’t be fined for providing student health insurance plans. Groups like the American Council on Education and the Council of Graduate Schools are making their case to Treasury Department officials. Mr. Culmer, of the National Association of Graduate-Professional Students, says that after learning about the Missouri move Friday, his group is also planning an advocacy campaign to educate lawmakers and officials at the IRS and the Health and Human Services Department.
What happened at Missouri, he says, is not in the spirit of the Affordable Care Act. "It was created to protect people like graduate students who need health insurance but can’t really afford it," Mr. Culmer says, "not kick them off plans that universities provide them."