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Even With Renewal of Benefits, the MU Graduate Student Health Insurance Issue is not Resolved

Rebecca Smith

Following outcry from both students and faculty, University of Missouri-Columbia Chancellor R. Bowen Loftin announced Friday that the University will "defer implementation" of its decision last week that would have stopped graduate student health insurance subsidies.

The University will pay previously promised health insurance subsidies to eligible graduate students.

MU says this reversal of the decision comes after “conversations with external experts and leadership, along with consultation with peer institutions, compliance experts and internal constituents.” 

But, as the phrase "defer implementation" implies, the complicated issues behind MU's original decision have not changed. MU has just adjusted its current plan.

A Sudden Fix 

A little over a week before classes begin, graduate students at the University of Missouri-Columbia found out they would not be receiving their promised health insurance subsidies from the university.

The University said it made this decision based on IRS guidance, which could affect the way universities across the country provide health insurance to graduate students.

Following the announcement,  graduate students scrambled to find out information about the decision and find alternative methods for insurance coverage.

On Monday, more than 500 graduate students crowded into an overflowing gym earlier this week – just days after learning that the university would not be giving them subsidies, which help them pay for health insurance.

For over an hour frustrated students gathered to speak.

Credit Rebecca Smith / Smith
The auditorium which held the forum on Monday was packed and some students had to remain standing or stand in the hallway outside.

Jennifer McKinney-Wilson was one of these graduate students. She is a fifth year PhD candidate in Sociology who makes about $11,000 a year - like most grad students at MU. The announcement last Friday came just 14 hours before her coverage lapsed.

“When we found out on Friday that we lost our insurance, I was 22 days from my delivery date,” McKinney-Wilson said. “Being a graduate student has always been a little difficult and challenging,” McKinney-Wilson said. “So up until today there were sacrifices, but they were doable. And now it doesn't seem so doable.”

Credit Rebecca Smith / KBIA
Jennifer McKinney-Wilson

McKinney-Wilson is one of the more than 3,000 graduate students that would have been affected at MU. The University did announce that it would be giving students a one-time fellowship to help offset the costs of health insurance, though the money couldn't be specifically earmarked to buy health insurance coverage. 

Anticipating Penalties

But what caused MU to stop giving these health insurance subsidies in the first place? Well the answer comes down to difficulties in interpreting the Affordable Care Act. Steven Bloom, the director of Federal Relations for the American Council on Education, explained.

“The IRS issued the regulations a couple of years ago,” Bloom said. “They were worried employers were going to avoid the employer mandate by giving money to employees, where the employee could then go and take that money and go out on the individual market and buy individual insurance.

The employee mandate is a requirement that large companies must provide affordable healthcare for employees. It’s intended to benefit employees. But it now affects graduate students because many of them are employed as graduate assistants – teaching assistants, research assistants and library assistants for the university.

The issue gets more complicated because instead of having them on a group plan, MU has graduate students buy insurance through its student health insurance plan. But the Department of Health and Senior Services defines student health insurance plans as, “individual health insurance.”

In July, an IRS official reportedly gave "informal guidance" that universities that offered these types of policies to graduate students might be subject to the same penalties as other businesses that violate these regulations. If that's true, if MU continued to offer these subsides they could face heavy fines of $100 per employee, per day. But whether this will affect universities is still uncertain without direct, clear guidance from the federal government.

So up until today there were sacrifices, but they were doable. And now it doesn't seem so doable.

Bloom said it’s a common practice for research universities to offer health insurance subsidies to graduate students. And many universities are now grappling with this issue.

But Bloom added that he doesn’t think the IRS intended for this to happen.

“They're not targeting the universities specifically,” Bloom said. “I think it’s just a matter of unintended consequences and I think we are all trying to figure a way through to figure out how schools could continue to do what they've always done in a way that's consistent with the law.”

Some other graduate schools in the U.S. have made changes similar to MU, while others wait for clearer guidance from the federal government. Bloom said the American Council on Education is working to get that guidance from the IRS, the Department of Health and Senior Services or the Department of the Treasury.

Other advocacy groups are also working to achieve these goals including the Council of Graduate Schools and the National Association for Graduate-Professional Students.

Future still unclear

The University's decision to "defer implementation" of this plan solves the problem for graduate students in the short-term, but leaves the maneuver waiting in the wings depending on the federal government's guidance. Before the ruling, Kristofferson Culmer, an MU student who happens to be President of the National Association of Graduate-Professional Students, said this proposal had students stressed. 

“A lot of graduate students are frustrated to the point now that they - they want to act - students feel that the university doesn’t value them the way they should be,” Kristofferson Culmer said.

Credit Rebecca Smith / KBIA
Kristofferson Culmer

Before the University stepped back its plan, Culmer  said students had talked about unionizing and planned a walkout for next week, during the first week of classes. It's not clear yet whether MU's decision to renew insurance coverage has changed those plans. While the insurance issue was a focus, the move also brought to the surface other issues graduate students have had with recent changes at MU, including recent cuts to tuition waivers for graduate students.  

“For grad students to be insured again and getting the insurance back, but also to see an overall increase in awareness of graduate issues and the university focusing on making this situation better for grad students,” Culmer said.

Rebecca Smith is an award-winning reporter and producer for the KBIA Health & Wealth Desk. Born and raised outside of Rolla, Missouri, she has a passion for diving into often overlooked issues that affect the rural populations of her state – especially stories that broaden people’s perception of “rural” life.
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