ACA Compliance for Colleges and Universities
These days, everyone’s talking about the push for more affordable tuition, student loan forgiveness and other breaks for college students – but what about the healthcare coverage concerns of higher education? The good news for college students is that their institutions may offer student health insurance, which typically involves the school paying at least some of the premiums for them. The bad news? Colleges and universities face some real issues when it comes to complying with the Affordable Care Act, not the least of which is the new red tape involved with administering student health plans.
For students who work for the school, it gets even more complicated because the premium reduction arrangement that comes with the student health plan is considered an employer payment plan (EPP) – and that’s a violation of the Affordable Care Act. Why? In short, the government doesn’t want college and university employees participating in student health plans because it is viewed as a form of insurance coverage "double dipping."
ACA Compliance for Colleges | A New Grace Period
In fact, this has become such a concern that as recently as February 5, three federal agencies (the Department of Labor, the Treasury Department and the Department of Health and Human Services) released Notice 2016-17: a federal provision of temporary transitional relief specifically for student health plans that offer premium reduction arrangements for school employees. The provision states that for plan years beginning before January 1, 2017, school employees who participate in student health plans with premium reductions will not receive a penalty. The idea is to give students time to make alternative arrangements and bring their plans into ACA compliance.
Avoiding Penalties for ACA Non-Compliance
For colleges that fail to comply during this grace period, there will be an excise tax of $100 per day, and that’s for each affected employee. If numerous students are employed by the school, those fees can add up quickly!
For colleges and universities that employ students, this issue must be addressed immediately. School administrators are encouraged to contact GM&A to inquire about ACA compliance for colleges now. We can help you determine the best course of action to get in compliance with the ACA and help you avoid stiff government penalties.