Missouri Ends Subsidies for Grad Student Worker Health Insurance

August 18, 2015

The University of Missouri notified graduate student employees that it will no longer pay for their health insurance, the Columbia Daily Tribune reported. In a letter to students, the university said businesses like theirs were prohibited from “providing employees subsidies specifically for the purpose of purchasing health insurance from individual market plans,” in accordance with the Affordable Care Act. A university administrator attributed the change to a recent interpretation of the law by the Internal Revenue Service, saying that health care plans such as Missouri’s Aetna package for grad students are “individual market plans” and therefore exempt from employer subsidies. Other Missouri employees use one of a number of “employer-sponsored plans” and are therefore unaffected, the university explained in an online memo.

The university said not complying with the law could result in fines. It is reportedly using the $3.1 million originally budgeted for health insurance subsidies for graduate student employees to create one-time fellowships of between $600 and $1,200 for those affected, to be spent at their discretion. Starting in the spring, graduate student employees will have to pay completely out of pocket for health insurance.

Graduate students have taken to Twitter and other social media to express their outrage and concern about being able to pay for health care. John Meador, a Ph.D. candidate in sociology, told KOMU that the university effectively “eliminated my ability to function as a graduate student. … They knew about it. I believe they could have warned us earlier.” The university became aware of the issue in late July and consulted lawyers and various national organizations for advice before notifying students late last week.

The change could affect other graduate student employees elsewhere in the U.S. Andy Brantley, president and chief executive of College and University Professional Association for Human Resources, said via email that several colleges and universities have "expressed concern about this issue, and we have been working with other higher ed associations to get clarity from the IRS." He added, "We are hoping the agency will issue a short-term waiver as it deliberates application of the [Affordable Care Act] in these situations so colleges and universities can move forward this year without fear of liability."

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