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Source: “MyHealthGuide Newsletter”
New York Universities Tests Self-funding of Student Health Insurance

MyHealthGuide Source: New York Dept of Financial Services, 8/1/2012, NYRelease

ALBANY, NY — New York state is letting four of its largest universities test the waters of self-insurance in order to offer lower-cost health insurance coverage to students, according to the state’s Department of Financial Services.

New York University, Columbia University, Cornell University and the University of Rochester–selected for their sizable endowments–will be permitted to transition their student health care plans from fully insured programs to self-funded models in a pilot program made possible through legislation signed into law last week by New York Governor Andrew M. Cuomo.

“This program makes it possible for a group of large universities to provide comprehensive health insurance to their students at a reasonable cost,” Governor Cuomo said. “Many colleges require students to have health insurance so that they are protected in case of illness or injury. While many students are covered by their parents’ health insurance, other students have to purchase coverage, which can be a burden for families already dealing with tuition and other costs. Allowing the schools themselves to offer health plans lowers the cost, while ensuring that students get the health coverage they need.”

Benjamin M. Lawsky, Superintendent of Financial Services, said, “Working with the universities, we came up with a creative solution that allows the universities to self-insure, providing better value health coverage to their students. Effectively, this bill creates a demonstration project that could eventually be extended to other colleges and more students.”
State Insurance Law does not permit a New York institution to self-fund a student health plan without a license to do business as an insurance company. As a result, an institution must purchase a policy from an insurer, or incur the costs of becoming a licensed insurance company.

The Superintendent of Financial Services will have regulatory oversight over the student health plans. To protect students, the universities will set up reserves to ensure funding will be available to pay health care claims.