Michelle’s Law Protects College Students' Health Insurance

When Michelle Morse was diagnosed with colon cancer at age 21 in late 2003, her doctor advised her to cut back on school during chemotherapy. But because she was covered under her mother’s insurance plan, which required her to be a full-time student, Michelle continued taking a full course load at Plymouth State University in New Hampshire, while enduring 48-hour chemotherapy infusions and harsh side effects. Michelle died in 2005, but President Bush signed a new law named after her on October 9, 2008, granting students a one-year medical leave from school without losing dependent insurance benefits. The law went into effect in late 2009.

Michelle’s mother, AnnMarie Morse, called it “my gift to Michelle.” Morse recalls that after a difficult day of talking with the state’s insurance department, she was told, “If you don’t like it, change the law.” “That’s how it all started,” she says. “Someone in the New Hampshire insurance department challenged me. And my motto has been, ‘Never mess with a mom who is passionate about a cause.’ ”

House Bill 2851 (HR 2851), otherwise known as Michelle’s Law, is a federal law that requires health plans and issuers of health insurance coverage to continue coverage for college students who are forced to take a leave of absence or change their enrollment status due to a serious illness or injury.

The leave of absence must:

• Be medically necessary (the group health plan must receive written certification by the child's treating physician stating the child is suffering from a serious illness or injury, and the leave or change of enrollment is medically necessary);
• Commence while the child is suffering from a serious illness or injury; and
• Cause the child to lose coverage under the plan.

Which Health Plans Must Comply?

Michelle’s Law does not apply to Medicare Supplement. This law applies to fully insured and self-funded (ERISA and non-ERISA) Group and Individual medical, pharmacy, behavioral health and, when part of the health plan, dental and vision coverage. Non-federal governments have the option to opt-out of the law.

Dates- The coverage must be continued until the earlier of:

• the date that is one year after the first day of the medically necessary leave of absence (or change in enrollment); or
• the date on which such coverage would otherwise terminate under the terms of the plan or health insurance coverage. For instance, if a dependent child on medical leave attains the maximum dependent age under the terms of the group health plan, their coverage will terminate.

Comparison to State Law

• This law is similar to a New Hampshire law which was enacted by the New Hampshire Legislature in 2006. The New Hampshire law was named after Michelle Morse, a college student who had to continue her studies on a full-time basis after being diagnosed with cancer in order to avoid losing health coverage under her parents’ plan.
• Since 2006, several other states have adopted their own versions of Michelle’s Law, including California, Maine, Vermont, Virginia and Wisconsin. New York has a similar law, which was enacted in 1999.
• States are entitled to enact more demanding laws, to the extent that they are not inconsistent with HR 2851. State laws generally apply to fully insured plans and, possibly self-funded non-ERISA plans. Self-funded ERISA plans will only be subject to the federal Michelle’s Law.
• HR 2851 applies only when the dependent is eligible under the terms of the plan or health insurance coverage by virtue of his or her student status. It will not have an impact on state laws that generally require coverage for all dependents through a specified age regardless of student status.

Frequently Asked Questions about Michelle’s Law:

• What takes priority – state or federal parity legislation?

Whichever is the more demanding will prevail. The state laws remain subject to the broad preemption language in ERISA, and will generally only apply to fully insured plans, and possibly self-funded non-ERISA plans. Standard preemption provisions of state law apply; therefore, Michelle’s Law would preempt state insurance law to the extent that state law would prevent the application of Michelle’s Law.

• What is the expectation when the 12-month continuance eclipses the dependent’s birth date and puts the dependent over the maximum student age?

Michelle’s Law applies only when the dependent is eligible under the terms of the plan or health insurance coverage by virtue of his or her student status. This means that when the plan’s maximum policy age is met, the student’s coverage will terminate and they will be offered continuation coverage through COBRA, state continuation or a conversion policy, if available.  

• What does the federal law define as the maximum student age?

Michelle’s Law will not have an impact on state laws that generally require coverage for all dependents, regardless of student status, through a specified age. Michelle’s Law applies only when the dependent is eligible under the terms of the plan or health insurance coverage by virtue of his or her student status. This means that when the plan’s maximum policy age is met, the student’s coverage will terminate and they will be offered continuation coverage through COBRA, state continuation or a conversion policy, if available.

• What defines a serious illness? 

Serious illness is defined by medical necessity which is certified by the dependent’s physician.  

• Are pharmacy benefits considered under medical?

Yes. Pharmacy benefits should be considered under Medical.

• How does Michelle’s Law Interact with COBRA?

As no guidance appears to be coming, employers need to decide whether COBRA should begin at the commencement or end of a Michelle’s Law leave. The more conservative view, which most employers seem to be adopting, is that COBRA starts at the end of a Michelle’s Law leave if the student loses coverage at that time.

Special thanks to Elyse Levin-Russman for bringing this issue to our attention.

-From“ Michelle’s Law Protects College Students' Health Insurance” by Elizabeth Whittington, CureToday.com at http://www.curetoday.com/index.cfm/fuseaction/article.show/id/2/article_id/922, retrieved 1/21/10 ; “Michelle’s Law to take effect October 9, 2009” September 13th, 2009, Illinois Health Agents, Inc. , at http://www.ilhealthagents.com/blog/2009/09/13/michelles-law-to-take-effect-october-9-2009/, retrieved 1/21/10; “President Bush Signs Michelle's Law: Health Coverage Extended for College Students on Medically Necessary Leave”, Hewitt Associates: http://www.hewittassociates.com/Intl/nA/en-Us/Knowledgecenter/LegislativeUpdates/LegislativeUpdatesDetail.aspx?cid=5681 retrieved 1/21/10 and “ Michelle's Law” at http://www.dorsey.com/michelles_law_eupdate_dec09/, December 7, 2009, retrieved 1/21/10.

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