MU chancellor speaks on reinstating graduate student subsidies
COLUMBIA- Following a week of turmoil, University of Missouri's chancellor broke his silence Friday after MU decided to reinstate graduate student health insurance subsidies.
Chancellor R. Bowen Loftin apologized, saying the university's sudden announcement it was going to drop the subsidies was 'insufficient.'
Loftin said the university will reinstate the subsidies for the upcoming school year, and it will be working with students who switched to other insurance plans to ensure they are properly compensated.
By reinstating the subsidies, the university is going directly against a provision in the Affordable Care Act that states employers cannot fund its employees' insurance.
By violating that provision, Loftin said the IRS could charge the university $100 per student per day, totalling more than $100 million if it decides to take action.
"If the IRS were to impose the full penalty for the entire year, the cost would probably bring the university down," Loftin said.
However, Loftin said the IRS hasn't investigated any cases related to universities violating the provision in the ACA.
While still providing subsidies to students, Loftin said the university is also looking to find a long-term solution that provides for the students while also meeting the ACA.
"We're not saying we won't do this, but just give us the time to work through this as a group, as a family, and figure out the best possible answer," Loftin said.
Loftin said he is going to continue forward with the task force of students and faculty he assigned Monday after a forum of more than 500 graduate students came together to discuss how they would move forward without the subsidies.
Loftin said he extended the deadline for the task force to present ideas by November 30.
"The risk we are taking now is because I want us to go back and really rethink how we engage with our students, as well as our faculty and staff," Loftin said. "This is how we do business typically, so we will continue to go back and make sure we continue to follow the principles of governance we've used here for many, many years."