It’s not uncommon for an international student, planning to study in the U.S., to get bombarded with ads for an international health insurance plan. The most compelling part of these plans is that they are cheap.
But as the saying goes, you get what you pay for.
Here are six reasons why you should not allow students to waive out of the Student Health Insurance Plan (SHIP) with an international plan.
If students are waiving with international plans, it is likely that your international student body will be covered by different companies with different benefits. As an administrator, this could make it difficult to provide valuable support to students trying to understand their benefits. It could take additional research and time to figure out what their specific plan covers and getting them help when they need it. If a student is on the SHIP, they will have the same benefits as their peers, allowing you to keep track of less benefits and save valuable time and resources.
2. Lapses in coverage
If a student on an international plan misses a payment, whether by accident or on purpose, the plan will be terminated. This means that you could have a group of students, whom you believe to be covered since their waiver was approved, who do not have any coverage at all. This is exactly what you were trying to avoid by having established a waiver program in the first place. If a student is on the SHIP, payment is provided up-front meaning you can rest assured that these students will have insurance for the entire coverage period.
3. Hidden Exclusions
When students purchase an international plan, there are often exclusions that are not communicated with the student up front. In many cases, the student will not know enough about insurance to ask about what is not covered by the plan. Valuable benefits such as maternity, pre-existing conditions, mental health, and birth control may not be covered by these plans, and the student may not find out until it is too late.
We had one situation in which an international student studying in Texas was riding in a car as a passenger when an accident occurred. The insurance plan did not cover the student’s medical bills because the friend who was driving had a license from Tennessee and not from Texas where the incident occurred.
4. Non-ACA Compliant
International plans are filed off-shore, and therefore, do not have to comply with the requirements of the Affordable Care Act (ACA.) Protections that the government has put in place for consumers will not be provided to these students. This means that the insurance plans do not have to cover pre-existing conditions, preventive benefits, and can set a maximum benefit limit (ACA-compliant plans have an unlimited benefit maximum.) Some plans do not even cover some of the most common medical claims among students, including mental health, alcohol/substance abuse, and tests and treatment for sexually transmitted diseases.
An age-banded plan will set the rate based on a covered person’s age. This means your younger and more like healthy students will have lowest costs while your older students will have higher rates. This will cause adverse selection as the older students will stay on the school plan while the younger one will waive off. The SHIP is underwritten so all students have the same rate.
6. Not renewable
International plans most often cannot be renewed. Although a plan can be purchased each year, if a student on the plan becomes ill and then purchases the plan for a second year, the plan may consider the illness a pre-existing condition. Any claims incurred because of that illness will not be covered. ACA-compliant plans cannot refuse treatment for pre-existing conditions, regardless of when they occurred.
Some colleges and universities still allow students to waive of the school’s student health insurance plan with these international plans. However, due to the reasons above, we highly suggest that, to obtain a waiver, students are required to have an ACA-compliant plan.
Learn more about waivers with our blog The Impact of Waivers on Plan Stabilization & How to Meet Regulatory Requirements.