leave of absence

Michelle's Law, otherwise known as H. R. 2851, was enacted to ensure that dependent college students, who have medical coverage as dependents of their parents, do not lose their health insurance coverage if they need to take a medical leave of absence. When such medical leave of absence would result in the student losing status as a full-time student, the student would typically be required to elect COBRA Continuation Coverage in order to continue his or her medical coverage while on the medical leave. According to the Congressional Budget Office, fewer than 1 percent of college students take a medical leave of absence annually. From an employee relations perspective, however, the effects of a family member's serious illness or injury on employee productivity can be devastating.

The law is named after a former college student by the name of Michelle Morse. She suffered from cancer and continued her course load at college in order to be able to remain covered by her parent’s health insurance as a dependent. Her doctors, however, had advised her to take a medical leave of absence, due to the severity of the treatments she was about to begin. But, when her parents and she found out that it would cost almost $600 per month for Michelle's medical coverage, they realized that they could not afford it. So against her doctor's wishes, Michelle continued her full-time course load in order to remain a dependent upon her parents' health insurance plan. Michelle died as a result of the cancer in 2005.

Michelle's parents advocated for the enactment of a law that would protect such students who need to take a medical leave of absence while dependents on their parent’s group of health insurance plans. In 2006 the state of New Hampshire enacted its own version of Michelle's Law. Soon thereafter, at least 10 other states enacted their own variations of Michelle's Law. And, in October of 2008, President George W. Bush signed H.R. 2851 amending the Employee Retirement Income Security Act to make Michelle's Law a federal law. Michelle's Law is effective for plan years beginning on or after October 9, 2009. Thus, for most health insurance plans that observe a calendar year anniversary date, this law will affect those plans beginning January 1, 2010.

Application of Michelle’s law

Under the new law, the group health insurance plan may not terminate an eligible college student’s health insurance coverage because the student takes a medically necessary leave of absence. Such "absence" may also include the student changing his or her status to part-time as a result of the illness or injury. The leave of absence must be medically necessary, must commence while the student is suffering from a serious illness or injury, and the leave of absence must otherwise cause the child to lose medical coverage under the health insurance plan. In order to be eligible, the student must have been a student at a post-secondary educational institution prior to the commencement of the leave. The student will be eligible for medical coverage for one year. Medical coverage will end after one year or the date the coverage would otherwise have terminated under the health insurance plan. Similar to COBRA, the student is eligible to continue the same benefits as if he or she had not taken a leave of absence. Also if the plan is modified during the leave the new plan applies to the student on the leave.

Procedural Issues

Procedurally, the group health insurance plan may require a written certification by the student’s physician certifying the child is suffering from a serious illness or injury and that a leave of absence is medically necessary. Health insurance plans will need to adjust the number of documents and forms in order to comply with this new law. For example information regarding student certification requirements will need to be modified so that this information is available for those who may need a leave of absence due to medical necessity. In addition, plan documents, summary plan descriptions and other benefit communication materials will need to be modified to ensure that they are consistent with the requirements of Michelle’s law. Human resources practitioners should now begin the process of reviewing such documents to ensure they are in compliance at the beginning of the next health insurance plan year.

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