Graduate student employees at state universities in Kansas will lose their health care subsidies starting next year, a change that is sparking concern among graduate students, and which the Kansas Board of Regents says is the result of a recent IRS opinion affecting higher education nationwide.

The change means those students will end up shopping for health insurance on the Affordable Care Act marketplaces, unless they are under age 26 and can therefore be covered under their parents’ policies.

The graduate teaching assistants union at the University of Kansas expressed concern Thursday that graduate employees could see sharp increases in their costs.

"The first thing that comes to mind is just, how much more expensive this is going to be," said David Cooper, president of the Graduate Teaching Assistants Coalition, an employee in the Sociology Department. "The cost is obviously the biggest concern."

Professor Robert Lee, chair of health policy and management at KU Medical Center said it’s hard to know what the cost difference will be for graduate student employees, but it may not be very high because most should qualify for federal subsidies on the ACA marketplace based on their income levels.

"My guess would be it’s going to cost them a little more," he said, "but I don’t think it’s going to cost them a lot more."

Kansas’ state universities employ thousands of graduate students, for example as teaching and research assistants. Those employed to a more than 50 percent appointment are eligible for insurance premium subsidies. According to the Board of Regents, about 2,250 graduate students were receiving the subsidies as of May. More than 3,700 were eligible for the option.

Kansas Board of Regents communications director Breeze Richardson said Kansas’ state universities plan on offering extra compensation to the students in place of the subsidies, but the amount may vary by campus.

"This is an issue for the entire country — not only Kansas," Richardson said. "The IRS has issued an opinion that an employing university can no longer provide a subsidy for graduate students’ health insurance under the ACA because our student plan is an individual plan.

"It is my understanding there are efforts underway at the federal level to get the IRS to change course," she added, "but it would likely be too late for the upcoming academic year 2017-2018 (next Fall)."

Richardson also said the change could affect the Board of Regents’ student health plan, because graduate students currently enrolled in it might end up dropping out.

Asked whether other options have been considered, such as putting graduate student employees onto the health care plan that faculty have access to, Richardson said yes.

"Other options were considered and determined not feasible," she said.

The University of Kansas issued two notices Wednesday to graduate students informing them of the impending change and of information sessions — the first of which will take place Friday — where they can learn more.

"We understand how crucial this benefit is, and are working to explore options that will help our graduate student employees secure healthcare coverage," the Office of the Provost wrote in one of the messages.

Lee said the current health care plan that graduate student employees have is similar to options on the ACA marketplace, and the marketplace could have advantages. For example, for students who find themselves facing serious illness, the marketplace plans would have subsidies for low-income individuals to help with high out-of-pocket expenses. Additionally, the marketplace offers some choice, rather than being limited to a plan chosen by the Board of Regents.

Ron Barrett, president of the University of Kansas chapter of the American Association of University Professors, said the wellbeing of graduate student employees needs to be a priority.

"Faculty members care very much about the GTAs — they are our colleagues," Barrett said. "They must be able to afford good health insurance."

Barrett said a concern for AAUP will be whether the student employees receive enough of a boost in compensation to cover their health insurance needs.

Cooper said members of the graduate teaching union will attend KU’s information sessions on the topic, and that the matter likely will be the top issue at the union’s next meeting on Oct. 13.

"This is something that needs to be addressed," he said, adding that it risks making KU less competitive if other universities across the country offer better health insurance options for graduate teaching assistants. "That’s going to be a huge factor."

Lee, who has been providing input to his institution on navigating the change, said universities need to figure out a number of logistical matters, including understanding when students would need to make decisions on their new sources of health insurance.

"We want to do the best thing for our students," he said.

According to the National Association of College and University Business Officers, "the IRS views student health insurance as individual coverage, which may create complications under the ACA that need to be addressed. The higher education community disagrees with the IRS’ interpretation and has requested guidance from the Treasury Department and the IRS on this issue to remove uncertainty and any future liability for institutions."

In June, a group of Democratic U.S. senators wrote to three federal agencies seeking to resolve the situation, which affects students at public and private institutions.

"We urge you to reconsider this interpretation, and to issue final guidance clarifying that it is consistent with the Affordable Care Act (ACA) for universities to provide subsidized student health insurance coverage to their graduate students," wrote the 17 senators, including two members of the Senate health committee.

The IRS issued guidance in February indicating colleges and universities would receive temporary relief from federal enforcement. This relief is coming to an end, but it does cover health plans for this academic year.