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Michelle's Law – Regulations Needed

In October 2008, President Bush signed "Michelle's Law" (H.R. 2851) designed to ensure that dependent college students who take medically necessary leaves of absence do not lose health insurance coverage. The law provides that a group health plan may not terminate a college student's health coverage simply because the child takes a medically necessary leave of absence from school or changes to part-time status as a result of such leave. The leave of absence must:

• Be medically necessary.
• Commence while the child is suffering from a serious illness or injury.
• Cause the child to lose coverage under the plan.

Plan sponsors are beginning to consider the impact that Michelle's Law will have on their health plans. Compliance with Michelle's Law is not required until the first day of the first plan year on or after October 9, 2009. However, fully insured plans and self-funded non-ERISA plans may already be required to comply with state versions of the law. Since 2006, New Hampshire, New York, Main, Vermont, Wisconsin and California have passed their own versions of the law. Until the federal version of the law goes into effect, plans that are subject to state law should review their plan document(s) to ensure they are in compliance.

For self-funded ERISA plans, there are a number of questions that require additional guidance from the government before November 1. Following is a list of these questions.

• What is the definition of "medically necessary"? Will group health plans be allowed to use their own definitions according to the terms of their written plan documents?
• What is the definition of "serious illness or injury"?
• Will Michelle's Law run concurrently with COBRA, or will COBRA coverage start after coverage provided under Michelle's Law ends?
• Will Michelle's Law be treated as alternative coverage under COBRA?
• Will employers be able to set their own deadlines for required paperwork supporting the student's need for medical leave, or will regulations specify when this information must be submitted?

Meritain Health will continue to follow this law and any additional guidance the federal government specifies. As we learn new information that will help plan sponsors with compliance, we will inform you immediately.