United States: Issue 99: Transition Relief For Student Health Plans And Other ACA Issues Impacting Student Employees

Last Updated: February 17 2016
Article by John Napoli

This is the ninety-ninth issue in our health care reform series of alerts for employers on selected topics in health care reform. (Our general summary of health care reform and other issues in this series can be accessed by clicking here.) This series of Health Care Reform Management Alerts is designed to provide a more in-depth analysis of certain aspects of health care reform and how it will impact your employer-sponsored plans.

Under Notice 2016-17, colleges and universities will have until the first day of the 2017 plan year or policy year, whichever the case may be, to move students who are classified as employees from coverage under the institution's student health plan to ACA compliant group health coverage.  This is welcomed relief as colleges and universities continue to evaluate and reevaluate their worker classification policies.

I.          Notice 2016-17 Transition Relief for Student Health Plans

The Agencies released Notice 2016-17 on February 5, 2016, which allows an employer payment plan (EPP) or HRA to be integrated with a student health plan for plan or policy years that begin prior to January 1, 2017.  The Agencies provided guidance in 2013 stating that an EPP and/or an HRA could only comply with the Patient Protection and Affordable Care Act of 2010, as amended (ACA) to the extent the EPP or HRA was integrated with a group health plan (i.e., the employee has to enroll in group health coverage in order to participate in the EPP or HRA).  This is because, for example, the ACA prohibits annual dollar limits on essential health benefits, and, by their definition, EPPs and HRAs are limited to the amount credited to the EPP and/or HRA. 

Student health plans are treated as individual health policies under federal law.  As such, a student health plan is not a group health plan, and, therefore, it cannot be integrated with an EPP and/or HRA, at least with respect to students who are employees of the university or college sponsoring the student health plan.1  Understanding that institutions of higher education need additional time to move coverage for affected student-employees, Notice 2016-17 provides a transition period so that institutions of higher education can find replacement group coverage for student-employees.  Under this transition period, colleges and universities will have until the first day of the first policy or plan year beginning on or after January 1, 2017 to provide student-employees who are full-time employees an offer of coverage that is otherwise compliant with the ACA.  For example, if the student-employee's policy year under the student health plan runs from September 1 through August 31, the college or university will have until September 1, 2017 to offer the student-employee group health coverage that is otherwise compliant with the ACA or face a potential penalty under the employer mandate, and, to the extent the student-employee remains enrolled in the student health plan and EPP and/or HRA, a penalty of $100 for each day the student-employee remains covered under the arrangement on and after September 1, 2017.

II.        When is a Student an Employee for ACA Purposes?

The Notice 2016-17 discussion provides an opportunity to re-address the issue of under what circumstances a student is treated as an employee for ACA purposes.  There are a number of rules that impact the analysis of whether a student is treated as an "employee" of the college or university for purposes of the ACA.  To begin, generally, the ACA adopts the common law approach to defining the employer-employee relationship, and the IRS uses a 20 factor test to evaluate the common law standard.  That means that current employment-law guidance defining student-employees is irrelevant to the ACA analysis, unless that guidance was issued under the ACA.  For example, current guidance issued by the U.S. Department of Labor (DOL) interpreting the Fair Labor Standards Act as applied to students who perform services for an institution of higher education as part of the student's educational experience is not determinative as to whether those same students are employees of the institution for ACA purposes.  Likewise, an NLRB ruling that a group of students are not employees for labor law purposes is not determinative as to whether those same students may be considered employees for purposes of the employer mandate under the ACA. 

That said, the Agencies have provided some guidance on when a student is a "student" and when a student is an "employee" for ACA purposes.  Generally, a student who is working at his or her college or university as part of a federal or state work study program is not considered an employee of the institution, at least with respect to his or her work through the program.  Likewise, a student who participates in an unpaid internship and externship is generally not treated as an employee of his or her college or university due to his or her work as an unpaid intern or extern.  However, students who work outside of a qualified work study program or through a paid intern or externship may be considered an employee of their colleges or universities, in which case the general hours counting rules under ACA would apply (e.g., seasonal employee rule and on-call hour rule). 


1 Note, student health plan coverage that is provided by a college or university to the student at a reduced rate does not violate ACA's prohibition to the extent the student is not an employee of the institution.  Simply stated, from an ACA perspective, an institution of higher education is free to provide non-employees with subsidized coverage under the institution's student health plan.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.