Michelle's Law

On October 9, 2008, President Bush signed Michelle's Law, which is intended to allow seriously ill college students, who are covered dependents under health plans, to continue coverage for up to one year while on medically necessary leaves of absence. The measure was inspired by, and named after, a college student in New Hampshire who was diagnosed with cancer but continued her studies on a full-time basis in order to avoid losing health coverage under her parents' plan.

This law is effective for plan years beginning on or after October 9,

2009 (calendar-year plans must comply beginning January 1, 2010) and to medically necessary leaves of absence beginning during such plan years.

 The legislation applies to health plans governed by ERISA, the Code, and the PHSA–some of the notable features are discussed below:

 ==> Medically Necessary Leave of Absence. The extension of coverage applies to a dependent child's leave of absence from, or any other change in enrollment at, a postsecondary educational institution (including colleges and universities) on account of a serious illness or injury from which the child is suffering while covered under a health plan that would otherwise cause the child to lose dependent status for purposes of coverage.

 ==> Length of Continued Coverage. Coverage continues until the earlier

of: (1) one year from the start of the medically necessary leave of absence, or (2) the date on which such coverage would otherwise terminate under the terms of the health plan.

 ==> Definition of Dependent Child. The child must be enrolled as a dependent under a health plan and qualify for coverage on the basis of being a student at a postsecondary educational institution, immediately before the medically necessary leave of absence involved.

 ==> Certification by Physician. Written certification must be provided by a treating physician of the dependent child certifying that such individual is suffering from a serious illness or injury that would require a medically necessary leave of absence.

 ==> Notice. The health plan (and a health insurance issuer providing coverage in connection with a health plan) is required to provide notification, in plain language, describing the terms of the continued coverage available under this law. This description should be included with any notice regarding a requirement for certification of student status for coverage under the plan.

 ==> No Change in Benefits During Leave; Continued Application in Case of Changed Coverage. A dependent child is entitled to the same level of benefits during a medically necessary leave of absence as the child had before taking the leave. Moreover, if any changes are made to the health plan during the leave, the child remains eligible for the changed coverage in the same manner as would have applied if the changed coverage had been the previous coverage, so long as the changed coverage remains available to dependent children under the plan.

 EBIA Comment: Note that some states already require an extension of coverage for "over-age" dependents (usually at a cost) under group and individual health plans offered on an insured basis, regardless of continued enrollment in college. This law seems to be aimed at avoiding loss of coverage where such state-law protection may not be available and, even then, only in the narrow circumstance where the leave of absence is medically necessary. For more information, see EBIA's Group Health Plan Mandates manual, which will be updated to reflect this new legislation.

Contributing Editors: EBIA Staff.