August 26, 2015

BYU Student Health Insurance loses ACA status: What every student needs to know

 Newsflash--starting August 31, 2015, BYU Student Health Insurance will no longer qualify as "minimum essential coverage" under Obamacare or the Affordable Care Act. BYU hasn't really done much to advertise this fact or its potential tax ramifications on students. I have wasted a couple hours of my life trying to figure out what this means for me. Hopefully, I can save you some time.


Wait, is this for reals?


Yep. From BYU's own website:

    To meet the ACA medical coverage requirement, a health plan must qualify as “minimum essential coverage,” which is a type of health coverage approved by the federal government. Beginning August 31, 2015, the BYU Student Health Plan will no longer be considered minimum essential coverage. [I find this next part funny...] Although the BYU Student Health Plan will not meet the ACA requirements, it will continue to meet the university’s health coverage requirement. [Good to know BYU isn't about to sell you insurance that will put your eligibility to be a BYU student at risk!]

So, yes. This is a legitimate issue, even if untrumpeted until now. Here's everything I think you need to know about BYU Health Insurance losing its "minimum essential coverage" status.


There could be fines, like enough to buy a new (old) car.


This loss of status means if you're enrolled in BYU Health Insurance for fall semester, you may have to pay nearly a thousand dollars in fines or 2% of your yearly household income (whichever is greater) when you file your 2015 taxes next April. Joy, joy. If you're enrolled for winter semester, the fines on your 2016 taxes could crest two grand or 2.5% of your yearly household income (whichever hurts more). 


Adapted from a graphic available at http://obamacarefacts.com/minimum-essential-coverage/

Should you be freaking out? Well, no. First, unless you take strange pleasure in the process, freaking out never helps anything. Second, odds are the fines won't apply to you. As a student, you're probably too stinking poor. 


Thankfully, there are exceptions. 


Some are more complicated than others. Some require work prior to filing your taxes. Thankfully, for many students like me, there is a relatively easy exemption to claim when we file our taxes because Utah never expanded Medicaid: Exemption G. As long as you make less than 138% of the federal poverty level and live in Utah, Exemption G will shield you from any fines. Here's a chart to help you figure out if you're currently poor enough.


Adapted from a graphic available at http://obamacarefacts.com/federal-poverty-level/

Since I am married with three kids and we'll make under $38,516 this year, I don't have to worry. Phew. Hopefully, you're giving a sigh of relief too. If not, take heart (and be grateful for your relative wealth). There are other exemptions which may apply, but they're more difficult to decipher or calculate. I include a comprehensive table for those interested. Exemption A, in particular, may be a low-hanging fruit worth noting.


Table from http://obamacarefacts.com/obamacare-mandate-exemption-penalty/, where additional information on each exemption can be found.


If no exceptions apply . . .


Typical enrollment periods for alternative insurance options are closed. However, an involuntary loss of minimum essential coverage can open a 120 window (60 days before and 60 days after the loss--Aug. 31) for you to shop for something else. That means if you have a fine to dodge or are disenchanted with BYU Health Insurance, you have hope. But the way BYU does things, you won't want to delay; you'll need to report another insurer by Sep. 9. That basically means you have a couple of days to get something else before Sep. 1 (most, if not all, insurers make you enroll at the start of a month).

I am not particularly upset with BYU Health Insurance, but I am interested in cheaper alternatives. I found a catastrophic plan (which I qualify for because I am under 30 years old) through SelectHealth which could save my family about $85 a month. There are, of course, cons in the SelectHealth insurance terms compared to BYU's terms, but we're thinking about it (there are also some pros).

Anyways, it's late and that just about endows you with everything I've learned through inspecting the intersection of Obamacare and BYU Health Insurance tonight.

Though I'm a law student, nothing in this should be looked at as legal or tax advice. Consider it general information from a well-intentioned, non-expert.

10 comments:

  1. Well of course, you're right not to be upset with BYU Health Insurance. It's the ACA (which is probably the biggest euphemism that exists) that I get more upset feelings toward.

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  2. I'm just disappointed that the First Presidency supports Obamacare Expansion here in Utah. Raising taxes, healthcare costs and it is an unsound piece of economic legislation.

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  3. Oh, its worth sticking with BYU insurance if you live like an active Mormon, definitely! You get the care you actually can use much more affordably because of the relatively low risk of the insured community. It's probably only "not approved" because they don't fund abortions or some other reason along those lines. If you are actually following the honor code, you can't get a better health insurance policy! I wish it were still financially feasible for me to be on it--I'm no longer a student. I'd keep it in a heartbeat if I could! Hang fines!

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  4. I assume that students who are still technically on their parents' ACA-compliant health insurance (and why shouldn't they be until they're 26 years old?) and who decide to purchase BYU health insurance as well for the convenience of having a local doctor will still be in compliance with the ACA despite this ruling.

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  5. Pahoran, my understanding is that as long as one of your policies qualifies, you're all good.

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  6. Adam, if you don't have insurance on the 31st they'll kick you out of school for the day, brand you a heretic, and burn down the law school because we are malcontents. After which, they will hunt each and every one of us down and force us to fight in a battle to the death. They will televise this on BYU TV. The winner gets to stay in school. The losers die and still have to pay their tuition.

    What they don't know is that we will come back from the grave, pass the bar and haunt all of them with ghostly wails saying things like: "Res Ipsaaa Locquitooooooooorrrrr" "Expressio Unius Est Exclusio Alteeeerrrrrriiiiiiiuuuuuussssss" and "ejusdeeeeemmmmm geneeeeerrrrriiiiiisssssss."

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  7. I don't understand the comment about BYU insurance being great for honor-code followers...a quick google search shows that the ACA doesn't require insurance policies to cover abortion any more than laws did in the past (and it looks like coverage under private policies is subject to state laws, not the ACA). We've been out of school/BYU insurance for a year and a half, but my guess is that it's partly related to BYU insurance not covering contraceptives. Maybe also having a high deductible for maternity coverage for non-student spouses ($6,500)? But I agree it won't affect most people. The vast majority student families I knew were covered by medicaid anyway (only way they could have afforded to have kids, especially in programs where working during the school year is prohibited). BYU insurance was *not* great for families.

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  8. Thanks for saying absolutely nothing about WHY it didn't qualify as an ACA policy. Low information writer suffers from politically motivated insurance bias? Any money you save with ACA comes out of somebody else's pocket you freaking sponge. Don't worry, if you have no ethics you can keep your ethics.

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  9. Justician, fair point about why BYU insurance no longer qualifies as minimum essential coverage. I am actually not 100% sure why. BYU doesn't elaborate on its website. I have done only a little searching online for the answer and from what I can tell there could potentially be a number of reasons (including out-of-pocket limits, deductibles, coverage of certain preventative care, etc.). Again, I am still foggy on this. If anyone knows more, please chime in.

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  10. Just called a guy named Dodd at Community Health Connect (801-818-3015) and he said married people shouldn't get fined if their combined gross income is under $16,000 and if they make over $16,000 they qualify for an Obamacare plan which is WAY cheaper and better. He said for zero-deductable full coverage it would be around $35-50 per month for both my wife and I. (Ages 25 and 23).

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