COLUMBIA, Mo. ― The University of Missouri said it is eliminating subsidies that help pay health insurance costs for graduate students employed by the school.
University officials say the change is due to a recent IRS interpretation of a section of the Affordable Care Act, which requires adults to have health insurance or face tax penalties, The Columbia Daily Tribune reported.
The school said in a Friday letter to students that the law “prohibits businesses from providing employee subsidies specifically for the purpose of purchasing health insurance from individual market plans.”
Since the IRS considers the university’s student health insurance plan from Aetna an individual market plan, the school would be fined if it continued to give students a subsidy to help with health insurance costs, said Leona Rubin, associate vice chancellor for graduate studies.
“We’re trying to comply with the interpretation of federal law,” Rubin said. “We’re not trying to hurt (students).”
The university is using the $3.1 million it budgeted for the subsidies to establish one-time fellowships for those employees. All graduate students with qualifying titles, including teaching assistantships and research assistantships, will be eligible for them this fall.
University spokeswoman Mary Jo Banken said the money can be spent on tuition, books, rent or other expenses. She said the university can’t give students money solely for health insurance costs.
Graduate Professional Council President Hallie Thompson said students started a private Facebook group Friday afternoon to discuss the change. She said some students have said they wished the college had informed them earlier of the subsidy elimination.
“People are seriously up in arms about this,” Thompson said. “They depend on this insurance … we need it every money and every day.”
The school first learned of the problem with health insurance subsidies late July and sought an outside legal opinion. University lawyers met and discussed the subsidies July 29.
Rubin said the college then contacted other universities to see how they were handling the change and reviewed its budget to see how it could assist students. She said the college wanted to explore its options for assisting students before informing students about the subsidy cut.
