Legally Mandated Coverage
When considering health insurance for international students, a good place to start is with any mandated insurance required by law. Although visa status, tax status and state regulations all can impose coverage requirements on international students, the vast majority of international students in the US are not required by law to have health insurance of any type.
Instead, the school has the role of determining whether and what level of coverage an international student must have. Before we explore the role that schools play, we will briefly examine the three regulatory areas that touch international student health insurance – the Affordable Care Act, J visa regulations, and state requirements.
Healthcare Reform and the Affordable Care Act
With the introduction of the ACA and the individual mandate, all US citizens and Resident Aliens are now required to have ACA-compliant health insurance or pay a fine with their tax return. However, all international students holding an F, J, Q or M visa are exempt from the ACA as "Non-Resident Aliens" for their first 5 calendar years in the United States, so they have no obligation to maintain ACA-style coverage.
The ACA is designed with lifetime coverage for US residents in mind, not short-term non-immigrant visitors, like international students. Required ACA coverage provisions like no lifetime maximum, full preventative care and wellness benefits, no pre-existing condition limitation and full maternity coverage with no waiting period are reflections of important policy decisions regarding the protection of insureds throughout their lifetime. However, those same benefits can be unnecessary or even inappropriate in a short-term, non-immigrant setting – thus the clear guidance is that international students are exempt from the requirement to carry such coverage (until they transition from a "Non-Resident Alien" to a "Resident Alien", generally mid-way through their sixth calendar year in the US).
For purposes of this guide, it's sufficient to understand that the 5-year exemption covers the vast majority of international students, and that some long-term international students and scholars who become Resident Aliens will need ACA coverage. For a full explanation of how the ACA applies to international students and other non-immigrant visitors, please see Appendix A and our articles covering these topics in the Insurance Explained section of our website.
J Visa Category
The US Department of State requires international students (and their dependents) in the J visa category to purchase insurance coverage that meets a list of requirements, and to maintain that policy for the full duration of their J program. During the initial appointment at their local Embassy, these students will need to provide proof of insurance before their visa is granted.J Visa requirements include:
- Medical benefits of at least $100,000 per accident or illness;
- Repatriation of remains in the amount of $25,000;
- Expenses associated with the medical evacuation of exchange visitors to his or her home country in the amount of $50,000;
- Deductibles not to exceed $500 per accident or illness; and
- A- or better rated carrier.
Please see Appendix B for the full list of requirements as detailed in the State Department Regulations.
Since all students should have coverage that exceeds these guidelines, and other factors are more important than visa status when selecting coverage, we do not need more analysis or explanation of J Visa requirements for purposes of this best practices guide. However, we have several other resources that delve more deeply into the J Visa insurance requirements, including the impact of the ACA on various J Visa categories, which can be found in Appendix C.
Only one state – Massachusetts – imposes an individual mandate like the ACA does, meaning all Massachusetts "residents" must carry insurance that meets Massachusetts’s minimum requirements, or else they will be penalized on their taxes. It's important to note that Massachusetts has a different definition and analysis of when you become a "resident" than that applied federally by the IRS for the ACA. An international student attending school in Massachusetts may be exempt from the ACA as a "non-resident alien" as determined by the IRS, but subject to the Massachusetts mandate as a result of having become a Massachusetts "resident."
All states have certain insurance "mandates", which apply only to insurance carriers and are basically levels of coverage that must be included in policies in order for an admitted carrier to do business in that state. Many states have reviewed and revised these mandates in the wake of the ACA to match or at least not conflict with the ACA's "essential health benefits." International carriers often work as "authorized non-admitted" carriers or "surplus lines" carriers, in which case their plans may not include those mandated coverages; domestic carriers will know the policy provisions they need to include in your state. Regardless, these type of mandates apply only to the insurance carriers and do not place any obligation on your international students to carry any type of health insurance.