“Michelle Law” Becomes Law

November 6, 2008

On October 9, President Bush signed into law (H.R. 2851) which amends the Employee Retirement Income Security Act, the Public Health Act and the Internal Revenue Code by providing that dependent full-time college students who take a medically necessary leave of absence for up to one year will not lose  their health insurance coverage under a new Code Section 9813. This requirement becomes effective for the first plan year beginning on or after October 9, 2009.

This new law is called “Michelle Law” in memory of Michelle Morse who maintained her full-time student load while receiving chemotherapy for colon cancer because she needed the family health coverage and could not afford the necessary COBRA premium to continue her coverage if she dropped out or reduced hours.

This new law will only apply to a group insured or self-insured health plan if the plan provides that for a dependent to continue to be covered after a specified age, he or she must be a full-time student.  For this new law to apply, the dependent child must have been enrolled in a group health coverage on the basis of his or her full-time student status on the date immediately preceding the leave of absence.

A self-funded nonfederal governmental plan can opt out of this new requirement by filing an election with the U.S. Department of Health and Human Services under the same provisions that apply to HIPAA and other federal health benefit laws.