College Athletes Often Bear the Cost of Injuries and Insurance

University of Minnesota star running back Mohamed Ibrahim suffered a season-ending leg injury in the team’s season-opening game against The Ohio State University on Sept. 2, throwing his football future into flux.

The redshirt senior was last season’s Big Ten running back of the year and a projected 2022 NFL Draft pick. He will have one year of NCAA eligibility remaining in 2022 if he chooses to use it and could apply for a medical hardship waiver to gain an additional year.

Ibrahim was not alone in suffering a season-ending injury in week one of the college football season. University of Michigan wide receiver Ronnie Bell saw his season end with a knee injury in his season-opening game and Clemson University safety Lannden Zanders was sidelined with a damaged shoulder. The University of Alabama linebacker Chris Allen is also likely done for the year after sustaining a foot injury in his season-opening game.

Injuries are an unfortunate part of college sports. A report by the Centers for Disease Control and Prevention estimated that between 2009-14 there were about 210,700 injuries on average per year among the roughly 478,900 college athletes participating in National Collegiate Athletic Association (NCAA) championship sports.

Minor injuries like pulled muscles and sprains are easily handled by university medical staff. But for serious injuries, athletes can face challenges such as securing long-term treatment, determining insurance coverage, and negotiating with healthcare providers.

Like many other matters involving college athletes and the NCAA, insurance is a complicated and rapidly evolving issue as athletes push for change and the courts become involved.

The NCAA was founded in 1906 to improve player safety and health. Today, the organization requires every student-athlete to have health insurance. For most athletes, that coverage is provided by a parent’s health insurance plan. The NCAA also supplies every athlete with catastrophic injury coverage, but that policy does not come into effect until the cost of treatment exceeds $90,000.

Additionally, the NCAA also has an insurance program available for elite athletes known as the Exceptional Student-Athlete Disability Insurance program. That program was created in 1990 as an option for star basketball and football players. The program has since been expanded to include baseball players, men’s hockey players, and women’s basketball players.

“The program enables qualifying student-athletes, as approved by the program administrator, to purchase a disability insurance contract with preapproved financing, if necessary. This program will provide the student-athlete with the opportunity to protect against future loss of earnings as a professional athlete due to a disabling injury or sickness that may occur during the collegiate career,” the NCAA states.

But this confusing and limited array of insurance programs falls short in the eyes of those athletes who dream of playing professionally. To protect potential future income they might lose as the result of an injury, some elite athletes acquire what’s known as a loss-of-value (LOV) insurance policy.

NCAA rules make it possible for universities to help players secure LOV policies using student assistance funds. Student assistance funds are provided to every university by the NCAA. But while the NCAA allows universities to pay for LOV policies out of this fund, not every university chooses to do so and not every athlete’s funding request is granted.

A recent example of an athlete taking advantage of this program was Duke University‘s Zion Williamson. Williamson was injured in 2019 when his shoe fell apart during a game. At the time, Williamson had an insurance policy that would pay him $8 million if his injury caused him to fall to 17 or lower in the NBA draft.

Luckily, Williamson didn’t have to file a claim as he was picked No. 1 by the New Orleans Pelicans. Still, injuries force some highly promising players to quit or fall in draft rankings.

According to industry professionals, student-athletes likely to become a top-10 pick will qualify for $10 million of permanent total disability insurance with a $5 million loss-of-value rider.

“Now it’s very, very rare to find a school that doesn’t utilize the SAF budget to purchase these policies for student athletes,” says Eric Chenowith, a former basketball player who runs an insurance brokerage.

The complicated approach to insurance stems from the NCAA’s decision decades ago to designate players as “student-athletes,” denying them coverage they might otherwise receive if they were regarded as employees.

The student-athlete designation was created when the widow of a football player named Ray Dennison unsuccessfully sued for benefits after he died in 1955 from an injury sustained in a game. In its ruling on the case, the Colorado Supreme Court stated football was not a business, establishing players as amateurs instead of employees.

But in recent years the debate over the employment status of players and whether college athletes should be paid has heated up. In June, the U.S. Supreme Court allowed payments to college athletes when they unanimously ruled that the NCAA’s caps on education-related benefits violated antitrust law.

That decision is expected to result in future challenges on other restrictions, such as the ban on player wages. An apparent factor in the court’s decision was the NCAA’s insurance program for elite athletes.

“The one limitation that is the most troublesome is … that [schools] can pay up to $50,000 for a $10 million insurance policy to protect student-athletes for their future earnings. Now, that sounds very much like pay for play,” Chief Justice John Roberts remarked during oral arguments. “You’re paying the insurance premium so that they will play at college and not in the pros. Doesn’t that undermine the amateur status theory you have?”

Ramogi Huma, executive director of the National College Players Association and plaintiff’s attorney advisor in the Supreme Court case, said in a statement, “This ruling makes clear that college athletes deserve every opportunity to seek and receive compensation — just like other students. The colleges don’t collude to prohibit pay for students working in their libraries or bookstores, and they shouldn’t continue doing this to college athletes.”

The Supreme Court decision could make it possible for universities to spend more freely on medical expenses for their athletes, a top goal of Huma’s organization.

“The [insurance] brokers are seeing this [as] an opportunity to write a tremendous amount of business,” said David Brookbank, a consultant who advises universities and conferences on athlete disability insurance.

Also having a potential impact is the new name, image, likeness (NIL) policy adopted by the NCAA in June. The NIL policy, which allows athletes to capitalize on their fame, could help some players build the cash reserves they might need in the event of an injury. Additionally, the NCAA will hold a special convention prior to Nov. 15 that could result in further changes impacting insurance for athletes.

“I think it’s really the shifting legal environment, the economic environment, the political environment — all of that — that creates this opportunity in a lot of ways to stop and erase the blackboard and draw a new chart again,” NCAA President Mark Emmert told USA Today. “And that’s a really, really powerful opportunity that can’t be wasted.”

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