New Law Helps Sick Students Keep Health Coverage

President Bush signed “Michelle’s Law” on Oct. 9. Under the new law, health plans must allow college students who take a leave of absence or reduce their class load because of illness to retain their dependent status under their parents’ health plan for up to one year. The act takes effect for medically necessary leaves of absence that begin in plan years beginning on or after Oct. 9, 2009 (Jan. 1, 2010, for calendar-year plans).

Before the bill was enacted, most college-age dependent students who had to drop out or pare back their schedules due to illness became ineligible for dependent coverage under their parents’ plans. Now college students will no longer lose medical benefits precisely when they need them most. Students’ eligibility for dependent coverage will continue for one year (unless the student would otherwise lose eligibility within the year).

To qualify for protection under Michelle’s Law, the following requirements must be met:

• The student must be enrolled as a full-time student immediately before the leave of absence or schedule reduction.
• The student must have written certification from a treating physician that the leave of absence or reduced schedule is necessary due to a severe illness or injury.
• The leave or reduced schedule must have triggered the loss of student status under the health plan.

If the plan sponsor changes group health plans during a medically necessary leave and the new health plan offers coverage of dependent children, the new plan will be subject to the same rules.

The bill is named for Michelle Morse, a New Hampshire student who was diagnosed with colon cancer while in college but stayed in school full time to remain insured under her parents’ policy. She died in 2005, six months after graduating.