In recently issued guidance, the U.S. Departments of Treasury, Labor, and Health and Human Services indicated that they will indefinitely extend relief to colleges and universities that subsidize the cost of individual insurance premiums for student employees.

Under previously issued guidance, a health reimbursement arrangement or other program that pays some or all of the premium for individual health insurance coverage may violate the prohibition against annual dollar limits under the Affordable Care Act (ACA) and the ACA requirement to cover the full cost of certain recommended preventive care items and services. Many colleges and universities have historically reduced the cost of individual student health insurance coverage for student employees, especially graduate students. Guidance issued earlier this year confirmed that subsidies of this nature could violate these ACA rules, but the guidance delayed enforcement until the first plan or policy year that begins on or after January 1, 2017.

Observing that Congress intended to preserve the ability of higher education institutions to continue offering otherwise permissible student health insurance, the new guidance delays enforcement until the departments provide otherwise.