Michelle’s Law prohibits group health plans from terminating the coverage of a dependent child enrolled in a post secondary educational institution on a medically necessary leave of absence which results in the loss of student status. Plans are prohibited from terminating the dependent’s coverage earlier than one year following the first day of the medical leave of absence, or the date the coverage would otherwise terminate. For example, if the student reaches the age limit for dependent children under the plan and is no longer eligible to be a plan participant.
For the purposes of Michelle's Law, a dependent child is an individual who was enrolled in dependent coverage on the basis of being a student at a postsecondary educational institution immediately prior to the first day of a medically necessary leave of absence.
A medically necessary leave of absence under Michelle’s Law is a leave of absence from or other change in enrollment status in a postsecondary educational institution which begins while the child is suffering from a serious illness or injury and has become medically necessary.
A group health plan or issuer can require a written certification by a treating physician of the dependent child which states that the dependent child is suffering from a serious illness or injury and that a leave of absence or other change in enrollment as a student is medically necessary. Plans requiring such certification are required to include a notice which describes the Michelle’s Law provision for continued coverage in the Plan Document/Summary Plan Description.
A dependent child whose benefits are continued under Michelle's Law is entitled to receive the same benefits that the child would have received if the child had continued to be a covered student at the educational institution and had not taken a medically necessary leave of absence.
Michelle's Law History
Michelle's Law became a law on October 9, 2008 and became effective for plan years beginning on or after October 9, 2009. Calendar year plans were required to comply by January 1, 2010.
Inspired and named after a college student who was diagnosed with cancer but continued her studies on a full time basis in order to remain eligible for health coverage under her parents' health plan, Michelle's Law allows students in postsecondary educational institutions with a serious illness or injury who are covered under their parents' plan to continue coverage for up to one year while on a medically necessary leave of absence.
Michelle's Law and the Affordable Care Act
The Affordable Care Act's (ACA) Health age 26 coverage mandate made student status irrelevant in defining group health plan eligibility for most children under age 26. Though limited, there are still instances where Michelle's law does apply, especially for plans which allow the coverage of individuals who are outside of the IRS definition of a qualifying child or who have remained dependent children after reaching age 26. For example, if a plan allows coverage of an employee’s dependent grandchild until age 24 if the grandchild is a full-time student at a post secondary institution, Michelle’s Law would apply if the grandchild became ill and needed to leave school due to the illness.
Michelle’s Law does not apply to a health plan which provides for only “excepted benefits," such as stand-alone dental and vision plans, health Flexible Spending Arrangements and Health Reimbursement Accounts.
Opt-Out for Certain Non-Federal Governmental Plans
Certain non-federal governmental plans that are not offered through insurance, for example, self-insured plans, may opt out of Michelle's Law requirements if they follow certain procedures. Although the ACA eliminated opt-out provisions for other mandates, it did not eliminate opt-out provisions for Michelle's Law requirements.
Michelle's Law and Coordination with COBRA Continuation coverage
A child who is eligible for continued coverage under Michelle's Law's and subsequently loses coverage under a parent's plan at the end of the continued coverage period, is eligible for continuation coverage under COBRA, if applicable, as a qualified beneficiary.
Other coverage options which may be available to individuals at the end of a Michelle's law extension, depending on eligibility requirements, include individual or market exchange plans and Medicaid or Medicare plans.
Failure to comply with Michelle's law will trigger an excise tax of $100 per day for each individual to whom such failure relates.
This content is being provided as an informational tool. It is believed to be accurate at the time of posting and is subject to change. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this information, Meritain Health is not exercising discretionary authority or assuming a plan fiduciary role, nor is Meritain Health providing legal advice.