Vermont says tuition insurance must include someone who has to leave school due to mental illness

From the Burlington Free Press in Vermont:

MONTPELIER, Vt. -- State regulators say tuition insurance offered at the University of Vermont and other colleges in the state must provide the same coverage to students who leave school for mental illness as for physical illness or injury.

That's not available now at any of the schools, prompting a complaint by a former UVM student and by the Vermont Association for Mental Health.

Under the policy available at UVM this year, for example, tuition would be refunded for withdrawal due to mental illness only if a student spent two days in a hospital. No similar hospitalization requirement exists in order to receive a refund for withdrawing because of a debilitating physical condition.

Also, the refund amounts vary. For mental illness, the maximum refund would be 60 percent of tuition and fees. For physical disabilities, the refund would be 100 percent.

"We don't believe having a difference between mental health benefits and physical health benefits is compliant with our broad interpretation and application of mental health parity," said Christine Oliver, deputy commissioner for health care administration. "Our plan is to issue a bulletin and give a date certain for people to make their products come into compliance."

The Vermont Legislature passed a law in 1997 that required health insurance companies to offer equal coverage of mental and physical illnesses and injuries.

Oliver said her agency has "used our general authority for fairness" to extend the parity requirement to disability coverage and now to tuition insurance.

"This is a small, but not insignificant step in actualizing the term parity in Vermont," said Ken Libertoff, executive director of the Vermont Association for Mental Health. "We applaud the Vermont health care administration for setting a standard that ends what we have viewed as a discriminatory and stigmatizing approach in the construction of tuition insurance at Vermont colleges and universities."

UVM began exploring options after receiving the complaint from the former student, said Gary Derr, vice president of executive operations. "What we decided to do is go for a policy next year with 80 percent coverage for both mental and physical health."

That proposed policy would have retained the hospitalization requirement for mental illness, Derr said. Earlier this week, he learned of the second requirement -- that there couldn't be a difference in hospitalization requirements. Now he has to go back to the company for a new plan.

The primary company offering tuition refund insurance is A.W.G. Dewar Inc. in Massachusetts. The company has partnered with more than 200 colleges and universities -- including five institutions in Vermont -- to offer tuition insurance.

Parents and students pay $100 to $375 a year for this coverage, which assures refunds long after colleges and universities would give back money to students who withdrew.

Dana Tufts, Dewar's president, explained the difference in the coverage reflects the greater frequency of claims for mental illness as the reason for withdrawal compared to physical illness or injury. "The hospital provision, while it sounds onerous, we have waived frequently," he added.

To provide 100 percent refunds to students for all medical reasons would be so expensive few people would buy it, Tufts said. Typically, between five and 10 percent of students buy tuition insurance.

Tufts said he was working with UVM officials to create an equal coverage policy. "We are hopeful."