Health insurance blunder impacted 131 Midd students

One hundred thirty-one Middlebury students could benefit from a settlement reached last month between the state of Vermont and a South Carolina insurance company, after the latter sold incomplete health insurance plans to Vermont college students between 2014 and 2016.

The beneficiaries, many of whom have since graduated, had purchased health insurance from the school during those years and had their insurance claims at least partially or completely uncovered by Companion Life Insurance. Instead, these students paid out of pockets for mental and physical health services that should have been covered — among them substance abuse treatments, procedures for athletic injuries and screenings for sexually transmitted infections.

Middlebury students made up more than half of the Vermont students affected by the blunder, probably because the college has a relatively large international student population, according to Financial Regulation Commissioner Mike Pieciak. Often, international students will purchase health insurance from their college because their parents’ plans might not have an equivalent in the states, he said.

Piecak said Companion, not Middlebury, is to blame for the situation.

“Middlebury and the other nine higher ed institutes were reliant on insurance professionals,” he said. “Rightly so.”

Companion, a South Carolina-based subsidiary of Blue Cross Blue Shield, was the only health insurance provider selling plans to Vermont college students at that time. Pieciak said the mishandled claims slipped under the Financial Regulation Commission’s radar because Companion did not file its forms with the department during those years.

When the department found out about the incomplete plans in 2016, it mandated Companion retroactively cover the procedures it had not covered until that point. Companion complied with state regulations in the 2016–2017 academic year, the last year in which it was still the college’s sole student health insurance provider. Today, students who choose to purchase the provided insurance plan are covered under the National Guardian Life Insurance Company.

About $274,000 of the $1.8 million settlement will be distributed to Middlebury students who come forward about their uncovered claims. The college has contacted those who were enrolled in the Companion plan about seeking restitution for mishandled claims. Other funds will go toward an educational campaign that the state will undertake to educate students about their health insurance options.