University of Minnesota officials are concerned that a provision in the House’s omnibus higher education bill could change how the school handles health insurance coverage for students.

Among other policy changes in the bill, it would require all postsecondary systems that require health insurance — including the University — to accept more types of coverage to waive the health insurance requirement. If passed, University officials worry they would have to issue more waivers, including for some poor insurance plans the University would reject under the current policy.

At the graduate-student level, it would make the University accept insurance plans that are not employer-based.

The bill states that the waiver option must at least allow students to purchase health care plans from employer group coverage, private insurers, association group coverage or MinnesotaCare.

The bill passed the Ways and Means Committee on Monday and is on its way to the House floor. It’s expected to be heard sometime in the next two weeks.

The health insurance measure comes after University veterinary graduate student Brett Rabe’s coverage through the American Veterinary Medical Association was denied by the University.

Rabe initially contacted Rep. Sarah Anderson, R-Plymouth, in September. He testified on behalf of the bill last month.

In a letter to Anderson, Rabe wrote, “It seems frivolous to me that the University is absolutely insisting that I spend $14,000 more over the next four years for coverage that isn’t even as good as what the AVMA is offering.”

Rabe, a father of three, is currently under his former employer’s insurance, but that’s set to expire as he no longer works there.

Anderson said she tried to deal with the issue by speaking directly to the University but received no response. She then brought the problem to the Legislature.

In the hearing last month, she described the University’s testimony as “disturbing” with its lack of sympathy toward this student’s concern.

Other students have had similar issues, Anderson said.

Systemwide, approximately 3 percent of waivers were denied in 2010, said Boynton Health Service Chief Operating Officer Carl Anderson. That doesn’t include undergraduates, who until next year are on an “honor” system for reporting their waiver coverage.

Starting in the fall, undergraduates will need to submit a hard waiver for their insurance coverage.

Carl Anderson said the University changed its waiver policy immediately after the hearing about Rabe’s case last month in order to accept more insurance policies for students with dependents.

Some of the University’s family coverage is somewhat expensive, he said.

The University is also looking at how it can lower costs for family plans.

“We may not be able to do that much, but we’re going to do our best to lower our dependent coverage,” Carl Anderson said.

Rep. Bud Nornes, chair of the House’s Higher Education Committee, said the University currently has too strict of policies on what insurance is approved through a waiver — especially “at a time when health insurance costs are affecting families.”

“I think it’s a good policy to require that coverage, but it has to be a little more flexible,” Nornes said.

The bill includes language that says postsecondary institutions “must include consideration for the fiscal impact of health plans on students or the student’s family.”

Although the University revised its policy, Rep. Anderson said the University could further change it.

She said the provision has been added into the omnibus bill to ensure this won’t happen to more students.

“This is about individuals being able to decide for themselves,” Rep. Anderson said.

However, the University doesn’t agree with the current language of the bill, Carl Anderson at Boynton said.

“We’re fine with waiving different types of plans,” Anderson said. However, he said the University wants to ensure that students are getting comparable coverage to its plan.

Typically, rejected waivers are non-employer sponsored plans that are more expensive with fewer benefits, he said.

Anderson said student fees would go up if the bill passes with its current language because the University’s costs to subsidize students insured under poor coverage would go up, resulting in fewer students on the University’s plan.

Part of Student Services Fees go to health coverage to subsidize students whose insurance doesn’t cover certain procedures.

The University is working with legislators to include some language to ensure students get comparable coverage to the school plan.

“On the surface the bill sounds like it’s reasonable,”  Anderson said. “But there might be some hidden implications that

people don’t understand.”