Quality Education for Children with Disabilities:
Topic Briefs for Parents and Their Advocates
#4 – A Free Appropriate Public Education: Using
Insurance to Pay for Special Education and Related Services
This topic brief focuses on the
legal requirement that special education and related services be made available
“free” to eligible students with disabilities, with special attention to the
circumstances under which a child’s insurance, including Medicaid and other
public health insurance programs, can be used to pay for services.
The Requirement of a “Free”
Appropriate Public Education
Both
the Individuals with Disabilities Education Act (“IDEA”) and the regulations
implementing Section 504 of the Rehabilitation Act of 1973 – the two major
federal laws addressing the education rights of children with disabilities –
provide that public school systems must make available to eligible children a
“free” appropriate public education.1
Both laws allow public school systems to charge students with
disabilities or their parents the same incidental fees, if any, charged
nondisabled students or their parents in connection with the regular education
program.2 However, whether required under IDEA or
§504, all special education, related services, assistive technology and
required evaluations must be provided at public expense, without cost to child,
parent or guardian.3 Consistent
with this rule, for example, parents cannot be required to use their children's
social security or SSI benefits to fund services due them under these laws.4
Using Private Health
Insurance to Pay for Services
Schools
may not require a parent to use private health insurance to pay for or
defray the cost of any services necessary to provide a child with a free
appropriate public education under IDEA; schools may access private insurance
only with the parent’s informed consent.5 Each time a school would like to use
a family’s private insurance, it must obtain informed consent and explain to
the child’s parents that they may refuse to allow their insurance to be used,
and that any such refusal will not relieve the school of its duty to ensure
that the child receives all
necessary services at no cost to
the family.6
Tapping Medicaid or Other
Public Health Insurance Benefits
The
rules under IDEA regarding the use of insurance are different for children who
have public insurance, such as Medicaid.
They do not expressly require schools to obtain informed consent from a
parent before tapping a child’s Medicaid or other public insurance.7 However, with a few exceptions not relevant
here, both IDEA and the Family Educational Rights and Privacy Act (FERPA)8
require schools to obtain parental consent before disclosing information from a
child’s education records to outside parties such as a Medicaid or other public
health insurance agency.9
Therefore, while the school may not need consent to tap into a child’s
public insurance benefits, it will need informed parental consent before
it can pass along the information it needs to disclose in order to do
so.
Under
IDEA, “consent” means that the parent has been fully informed of all relevant
information, in her native language or
other mode of communication; that the parent understands and agrees in writing;
that the consent describes what the school system seeks to do, and lists the
records that will be released and to whom; and that the parent understands that
giving consent is voluntary, and that she can change her mind at any time.10 By virtue of these requirements, parents
should have advance notice of the school’s efforts to use a child’s public
health insurance to pay for special education services, and an opportunity to
prevent any related disclosure of information from the child’s education records.11
In
addition, before tapping a child’s Medicaid or other public health insurance,
the school system must make sure that tapping the child’s public health
insurance will not
•
decrease available
lifetime coverage or any other insured benefit, or
•
result in the
family paying for services that the child needs outside of school, and that
otherwise would be covered by the public insurance program, or
•
increase
premiums or lead to discontinuation of the insurance, or
•
risk loss of
eligibility for home and community-based waivers, based on total health-related
expenditures.12
School personnel acting without the participation
of the child’s parent would lack the information necessary to ensure that none
of these bad consequences will ensue.
Thus, to comply with these provisions, it would seem that before tapping
public insurance, school officials, at a minimum, must inform the parent of the
school’s interest in utilizing public insurance benefits; explain exactly what
it is that they propose to do, as well as the above-listed constraints on their
freedom to do so; seek from the parent (and other relevant sources) the information
necessary to make the required determinations; solicit any parental concerns;
and give parents a meaningful opportunity to express any such concerns.
School
officials may not require parents to sign up for Medicaid or other public
insurance as a condition for their child receiving services under IDEA.13 Nor may they require parents whose children are
enrolled in public insurance programs to incur any out-of-pocket expenses, such
as paying a deductible or co-payment.14
A Final Note About the Use of Insurance
Whether
insurance is public or private, parents and students who suffer financial loss
when insurance is used to pay for what should have been a free
appropriate public education may recover their losses from the responsible
school system.15
Parents and advocates should also note that while the above specific
provisions regarding public and private insurance use come from the IDEA
regulations, the U.S. Department of Education/Office for Civil Rights has long
opined that schools may not require parents to use health insurance to help pay
for services required under §504 if doing so would pose a risk of financial
loss to parent or child.16
NOTES
2. See 34 C.F.R. §300.26(b)(1); 34 C.F.R. §104.33(c).
3. 20 U.S.C. §§1401(8)(A), (25); 34 C.F.R. §300.13(a); 34 C.F.R. §104.33(c).
4. McLain v. Smith, 16 Education of the Handicapped Law Report [EHLR] 6 (E.D. Tenn. 1989).
6. Id. See also 34 C.F.R. §300.500(b)(1), regarding consent in general.
9. 34 C.F.R. §300.571; 34 C.F.R. §99.30 (FERPA regulations). See also Inquiry of Wisconsin Department of Public Instruction, 28 Individuals with Disabilities Education Law Report] IDELR 497 (Family Policy Compliance Office 1997). The Family Policy Compliance Office, part of the U.S. Department of Education, enforces compliance with FERPA.
11. In many states, the Medicaid (or other public insurance) agency requires parents to sign a broad consent form allowing it to obtain from other agencies, including schools, the information it needs in order to administer the public insurance program. The Family Policy Compliance Office, which enforces FERPA, has stated that, depending upon the details, these consent forms may satisfy the requirement of prior parental consent for disclosure of information from education records. See Inquiry of Wisconsin Department of Public Instruction, supra. However, a broad consent form provided by the public insurance agency as a part of the application process, and before the school even decided that it would like to tap the public insurance (for which the child presumably has not yet even been found eligible), would not seem to meet the IDEA requirements for consent discussed above.
12. 34 C.F.R. §300.142(e)(2)(iii).
13. 34 C.F.R. §300.142(e)(2)(i).
14. 34 C.F.R. §300.142(e)(2)(ii).
15. See Shook v. Gaston County Board of Education, 882 F.2d 119 (4th Cir. 1989), cert. denied, 493 U.S. 1093, 110 S. Ct. 1166 (1990); Seals v. Loftis, 614 F. Supp. 302 (E.D.Tenn. 1985).
Financial loss from the use of insurance might occur in a variety of ways, including, e.g., a decrease in available lifetime coverage under the policy; a decrease in available annual coverage or any other benefit under the policy; payment of a deductible amount for a particular service; an increase in premiums; discontinuation of the policy; or decreased future insurability with a different insurance company if the educational services for which insurance is used are deemed treatment for a pre-existing medical condition. It also includes the kinds of losses, listed above, that preclude a school from tapping Medicaid or other public insurance benefits.
16. See Trans Allied-Medical Services, Inc., 16 EHLR 963(OCR 5/30/90).