On Oct. 9, 2008, President Bush signed Michelle’s Law, which amends ERISA, the Internal Revenue Code and the Public Health Service Act. The law prevents group health plans from cancelling coverage of dependents who are students, for up to one year while on a medically necessary leave of absence. Variations of the law had already been passed in several states, but the new federal law will have a nationwide impact and will apply to all group health plans, regardless of whether they are insured or selfinsured.
Michelle's Law was inspired by Plymouth State University student Michelle Morse, who died at age 22 of cancer. Michelle was forced to continue as a full-time student after realizing that reducing her course load would cause her to lose coverage under her family’s health plan. Michelle’s Law is an effort to ensure that college students like Michelle will be able to address their medical needs without fear of losing health coverage.
The provisions of the law apply when a student covered by a group health plan takes a “medically necessary leave of absence.” Under the law, to qualify as a “medically necessary leave of absence,” a leave must (i) start while the student is experiencing a severe illness or injury, (ii) be determined by a physician to be medically necessary, and (iii) cause the student to lose full-time student status under the terms of the plan. If the student experiences a medically necessary leave of absence and other conditions are satisfied, a health plan may not terminate coverage for up to the earlier of one year, or the date on which coverage would otherwise end under the plan.
Michelle’s Law applies to plan years beginning on or after Oct. 9, 2009 (Jan. 1, 2010 for calendar year plans), and medically necessary leaves of absence during such plan years. Health plans are required to provide participants notice of the continued coverage under the law, which should be included with any request for verification of student status. Plan sponsors will also be required to amend their plan documents, summary plan description and administrative processes to reflect the provisions of the law. We expect further guidance to be issued during 2009.