69–006 

110TH CONGRESS REPT. 110–806 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

MICHELLE’S LAW 

JULY 30, 2008.—Ordered to be printed 

Mr. DINGELL, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

[To accompany H.R. 2851] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 2851) to amend the Employee Retirement Income Security Act of 1974, the Public Health Service Act, and the Internal 

Revenue Code of 1986 to ensure that dependent students who take 

a medically necessary leave of absence do not lose health insurance 

coverage, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that 

the bill as amended do pass. 

CONTENTS 

Page 

Amendment .............................................................................................................. 2 

Purpose and Summary ............................................................................................ 5 

Background and Need for Legislation .................................................................... 5 

Hearings ................................................................................................................... 6 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 6 

Committee Oversight Findings ............................................................................... 8 

Statement of General Performance Goals and Objectives .................................... 8 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 8 

Earmarks and Tax and Tariff Benefits .................................................................. 8 

Committee Cost Estimate ....................................................................................... 8 

Congressional Budget Office Estimate ................................................................... 8 

Federal Mandates Statement ................................................................................. 9 

Advisory Committee Statement .............................................................................. 10 

Constitutional Authority Statement ...................................................................... 10 

Applicability to Legislative Branch ........................................................................ 10 

Section-by-Section Analysis of the Legislation ...................................................... 10 

Changes in Existing Law Made by the Bill, as Reported ..................................... 12 


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AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as ‘‘Michelle’s Law’’. 

SEC. 2. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

(a) AMENDMENTS OF ERISA.—

(1) IN GENERAL.—Subpart B of part 7 of title I of the Employee Retirement 

Income Security Act of 1974 (29 U.S.C. 1185 et seq.) is amended by adding at 

the end the following: 

‘‘SEC. 714. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

‘‘(a) MEDICALLY NECESSARY LEAVE OF ABSENCE.—In this section, the term ‘medically necessary leave of absence’ means, with respect to a dependent child described 

in subsection (b)(2), a leave of absence of such child from a postsecondary educational institution (including an institution of higher education as defined in section 102 of the Higher Education Act of 1965), or any other change in enrollment 

of such child at such an institution, that—

‘‘(1) commences while such child is suffering from a severe illness or injury; 

‘‘(2) is medically necessary; and 

‘‘(3) causes such child to lose full-time student status under the terms of the 

plan. 

‘‘(b) REQUIREMENT TO CONTINUE COVERAGE.—

‘‘(1) IN GENERAL.—In the case of a dependent child described in paragraph (2), 

a group health plan (or health insurance coverage offered in connection with 

such a plan) shall not terminate coverage of such child due to a medically necessary leave of absence before the date that is the earlier of—

‘‘(A) the date that is 1 year after the first day of the medically necessary 

leave of absence; or 

‘‘(B) the date on which such coverage would otherwise terminate under 

the terms of the plan. 

‘‘(2) DEPENDENT CHILD DESCRIBED.—A dependent child described in this paragraph is a beneficiary under the plan who—

‘‘(A) is a dependent child, under the terms of the plan, of a participant 

or beneficiary of the plan; 

‘‘(B) was enrolled in the plan or coverage as of the first day of the medically necessary leave of absence involved; and 

‘‘(C) was enrolled as a full-time student at a postsecondary educational 

institution (as described in subsection (a)) until the first day of the medically necessary leave of absence involved. 

‘‘(3) CERTIFICATION BY PHYSICIAN.—Paragraph (1) shall not apply to a group 

health plan (or health insurance coverage offered in connection with such a 

plan) unless certification by the child’s attending physician is submitted to the 

plan or issuer stating that the dependent child is suffering from a severe illness 

or injury and that the leave of absence is medically necessary. 

‘‘(c) NO LOSS OF FULL-TIME STATUS DUE TO BREAK IN SEMESTER.—Any breaks in 

the school semester shall not disqualify a dependent child described under subsection (b) from coverage under this section. 

‘‘(d) NO CHANGE IN BENEFITS.—A dependent child whose benefits are continued 

under this section shall be entitled to the same benefits as if (during the medically 

necessary leave of absence) the child continued to be a full-time student at the institution of higher education and was not on a medically necessary leave of absence. 

‘‘(e) COVERAGE UNDER SUCCESSOR PLAN.—If a plan sponsor changes group health 

plans after the first day of a medically necessary leave of absence of dependent child 

described in subsection (b) but before the date described under subsection (b)(1), and 

such new group health plan offers coverage of beneficiaries as dependent children, 

such new group health plan shall be subject to this section in the same manner as 

the predecessor group health plan. 

‘‘(f) PRESUMPTION.—For purposes of administrative or judicial proceedings, upon 

certification under subsection (b)(3), there shall be a rebuttable presumption that 

the requirements of paragraphs (1) and (2) of subsection (a) have been met.’’. 


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(2) CONFORMING AMENDMENT.—The table of contents in section 1 of such Act 

is amended by inserting after the item relating to section 713 the following new 

item: 

‘‘Sec. 714. Coverage of dependent students on medically necessary leave of absence.’’. 

(b) AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.—

(1) GROUP MARKETS.—Subpart 2 of part A of title XXVII of the Public Health 

Service Act (42 U.S.C. 300gg–4 et seq.) is amended by adding at the end the 

following new section: 

‘‘SEC. 2707. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

‘‘(a) MEDICALLY NECESSARY LEAVE OF ABSENCE.—In this section, the term ‘medically necessary leave of absence’ means, with respect to a dependent child described 

in subsection (b)(2) in connection with a group health plan, a leave of absence of 

such child from a postsecondary educational institution (including an institution of 

higher education as defined in section 102 of the Higher Education Act of 1965), or 

any other change in enrollment of such child at such an institution, that—

‘‘(1) commences while such child is suffering from a serious illness or injury; 

‘‘(2) is medically necessary; and 

‘‘(3) causes such child to lose student status for purposes of coverage under 

the terms of the plan. 

‘‘(b) REQUIREMENT TO CONTINUE COVERAGE.—

‘‘(1) IN GENERAL.—In the case of a dependent child described in paragraph (2), 

a group health plan (or a health insurance issuer that provides health insurance coverage in connection with a group health plan) shall not terminate coverage of such child under such plan or health insurance coverage due to a medically necessary leave of absence before the date that is the earlier of—

‘‘(A) the date that is 1 year after the first day of the medically necessary 

leave of absence; or 

‘‘(B) the date on which such coverage would otherwise terminate under 

the terms of the plan or health insurance coverage. 

‘‘(2) DEPENDENT CHILD DESCRIBED.—A dependent child described in this paragraph is, with respect to a group health plan, a beneficiary under the plan 

who—

‘‘(A) is a dependent child, under the terms of the plan, of a participant 

or beneficiary of the plan; and 

‘‘(B) was enrolled in the plan (or health insurance coverage offered in connection with the plan), on the basis of being a student at a postsecondary 

educational institution (as described in subsection (a)), immediately before 

the first day of the medically necessary leave of absence involved. 

‘‘(3) CERTIFICATION BY PHYSICIAN.—Paragraph (1) shall apply to a group 

health plan (or health insurance coverage offered by an issuer in connection 

with a group health plan) only if the plan or issuer has received written certification by a treating physician of the dependent child which states that the child 

is suffering from a serious illness or injury and that the leave of absence (or 

other change of enrollment) described in subsection (a) is medically necessary. 

‘‘(c) NOTICE.—A group health plan, and a health insurance issuer providing health 

insurance coverage in connection with a group health plan, shall include, with any 

notice regarding a requirement for certification of student status for coverage under 

the plan or coverage, a description of the terms of this section for continued coverage during medically necessary leaves of absence. Such description shall be in language which is understandable to the typical plan participant. 

‘‘(d) NO CHANGE IN BENEFITS.—A dependent child whose benefits are continued 

under this section shall be entitled to the same benefits as if (during the medically 

necessary leave of absence) the child continued to be a covered student at the institution of higher education and was not on a medically necessary leave of absence. 

‘‘(e) COVERAGE UNDER SUCCESSOR PLAN.—If a plan sponsor changes group health 

plans after the first day of a medically necessary leave of absence of a dependent 

child described in subsection (b) but before the date described under subsection 

(b)(1), and such new group health plan offers coverage of beneficiaries as dependent 

children, such new group health plan shall be subject to this section in the same 

manner as the predecessor group health plan.’’. 

(2) INDIVIDUAL MARKET.—Subpart 3 of part B of title XXVII of such Act (42 

U.S.C. 300gg–51 et seq.) is amended by adding at the end the following new 

section: 


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‘‘SEC. 2753. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

‘‘The provisions of section 2707 shall apply to health insurance coverage offered 

by a health insurance issuer in the individual market in the same manner as they 

apply to health insurance coverage offered by a health insurance issuer in connection with a group health plan in the small or large group market.’’. 

(c) AMENDMENTS TO THE INTERNAL REVENUE CODE.—

(1) IN GENERAL.—Subchapter B of chapter 100 of the Internal Revenue Code 

of 1986 (relating to other group health plan requirements) is amended by inserting after section 9812 the following new section: 

‘‘SEC. 9813. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

‘‘(a) MEDICALLY NECESSARY LEAVE OF ABSENCE.—In this section, the term ‘medically necessary leave of absence’ means, with respect to a dependent child, a leave 

of absence of such child from a postsecondary educational institution (including an 

institution of higher education as defined in section 102 of the Higher Education Act 

of 1965), or any other change in enrollment of such child at such an institution, 

that—

‘‘(1) commences while such child is suffering from a severe illness or injury; 

‘‘(2) is medically necessary; and 

‘‘(3) causes such child to lose full-time student status under the terms of the 

plan. 

‘‘(b) REQUIREMENT TO CONTINUE COVERAGE.—

‘‘(1) IN GENERAL.—In the case of a dependent child described in paragraph (2), 

a group health plan shall not terminate coverage of such child due to a medically necessary leave of absence before the date that is the earlier of—

‘‘(A) the date that is 1 year after the first day of the medically necessary 

leave of absence; or 

‘‘(B) the date on which such coverage would otherwise terminate under 

the terms of the plan. 

‘‘(2) CHILD DESCRIBED.—A dependent child described in this paragraph is a 

beneficiary under the plan who—

‘‘(A) is a dependent child, under the terms of the plan, of a participant 

or beneficiary of the plan; 

‘‘(B) was enrolled in the plan or coverage as of the first day of the medically necessary leave of absence involved; and 

‘‘(C) was enrolled as a full-time student at a postsecondary educational 

institution (as described in subsection (a)) until the first day of the medically necessary leave of absence involved. 

‘‘(3) CERTIFICATION BY PHYSICIAN.—Paragraph (1) shall not apply to a group 

health plan (or health insurance coverage offered in connection with such a 

plan) unless certification by the child’s attending physician is submitted to the 

plan (or the issuer health insurance coverage in connection with the plan) stating that the dependent child is suffering from a severe illness or injury and that 

the leave of absence is medically necessary. 

‘‘(c) NO LOSS OF FULL-TIME STATUS DUE TO BREAK IN SEMESTER.—Any breaks in 

the school semester shall not disqualify a dependent child described under subsection (b) from coverage under this section. 

‘‘(d) NO CHANGE IN BENEFITS.—A dependent child whose benefits are continued 

under this section shall be entitled to the same benefits as if (during the medically 

necessary leave of absence) the child continued to be a full-time student at the institution of higher education and was not on a medically necessary leave of absence. 

‘‘(e) COVERAGE UNDER SUCCESSOR PLAN.—If a plan sponsor changes group health 

plans after the first day of a medically necessary leave of absence of a dependent 

child described in subsection (b) but before the date described under subsection 

(b)(1), and such new group health plan offers coverage of beneficiaries as dependent 

children, such new group health plan shall be subject to this section in the same 

manner as the predecessor group health plan. 

‘‘(f) PRESUMPTION.—For purposes of administrative or judicial proceedings, upon 

certification under subsection (b)(3), there shall be a rebuttable presumption that 

the requirements of paragraphs (1) and (2) of subsection (a) have been met.’’. 

(2) CONFORMING AMENDMENT.—The table of sections for subchapter B of chapter 100 of such Code is amended by inserting after the item relating to section 

9812 the following new item: 

‘‘Sec. 9813. Coverage of dependent students on medically necessary leave of absence.’’. 

(d) EFFECTIVE DATE.—The amendments made by this Act shall apply with respect 

to plan years beginning on or after the date that is one year after the date of the 


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1 Based on a CRS review of State statutes and ‘‘The Changing Definition of ‘Dependent’: Who 

is Insured and For How Long?’’—National Conference of State Legislatures, Updated February 

2008. 2 Based on a CRS review of State statutes and ‘‘The Changing Definition of ‘Dependent’: Who 

is Insured and For How Long?’’—National Conference of State Legislatures, Updated February 

2008. 3 Based on a CRS review of State statutes and ‘‘The Changing Definition of ‘Dependent’: Who 

is Insured and For How Long?’’—National Conference of State Legislatures, Updated February 

2008. 

enactment of this Act and to medically necessary leaves of absence beginning during 

such plan years. 

PURPOSE AND SUMMARY

The purpose of H.R. 2851, Michelle’s Law, is to ensure continuity 

of health coverage for students, who because of a serious illness or 

injury, can no longer maintain student status. 

BACKGROUND AND NEED FOR LEGISLATION

Michelle Morse was a full-time college student at Plymouth State 

University in New Hampshire who was diagnosed with colon cancer in 2003. Her doctors recommended that she cut back her college 

course load while undergoing chemotherapy treatment. She was informed, however, that if she cut back her classroom hours, she 

would lose her health insurance coverage because she would no 

longer qualify as a dependent on her parents’ health insurance 

plan. 

Other health insurance coverage options were unaffordable. As a 

result, she was forced to remain in school as a full-time student 

while undergoing 14 rounds of chemotherapy. In 2005, she succumbed to her illness. The case spurred interest in protections that 

would extend the definition of dependents to allow college students 

needing medical leaves of absence from class work to retain health 

insurance coverage on their parents’ policies. 

Private health insurance contracts define when a person can be 

considered to be a ‘‘dependent’’ for the purpose of purchasing a 

family health insurance plan. It is common practice, although far 

from universal, that dependents are considered to include collegeage students as long as those students are enrolled in college fulltime. Many States also have legislation that impacts how those dependents can be defined. At least six States—Maine, New Hampshire, New York, Vermont, Virginia, and Wisconsin—have enacted 

laws similar to Michelle’s Law. Those State laws extend the ability 

of dependents to remain on their parents’ plan for a limited period 

of time during a medical leave from full-time student status.1 Four 

States—Maryland, Michigan, Rhode Island, and Texas—require insurers to allow college-age dependents who are enrolled part-time 

in school to remain on their parent’s health insurance plan.2 At 

least nine additional States—Colorado, Florida, Indiana, Massachusetts, Missouri, Montana, New Jersey, New Mexico, and Utah—

have enacted laws that would define dependents to include those 

older than 18 (the exact age varies) regardless of student status.3

States’ laws, however, have limited applicability. States can 

enact laws that apply to individually-offered health insurance (not 

offered through employment) and to employment-based coverage as 

long as it is coverage that is comprised of an insurance product ofVerDate Aug 31 2005 14:09 Aug 02, 2008 Jkt 069006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR806P1.XXX HR806P1

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4 About 54 percent of workers were enrolled in employment-based coverage that was self-insured in CY 2005. Unpublished Department of Labor estimates based on March 2006 CPS. 

fered by companies in the business of selling insurance (including 

health maintenance organizations.) 

If an employer self-insures (funds and retains the risk that the 

premiums collected may not cover the cost of medical benefits provided) its employees, State laws regulating the business of insurance do not apply. Over one-half of all employees are covered by 

self-insured employment-based coverage that is exempt from State 

insurance laws according to the Department of Labor.4

Thus to protect individuals across all plan types, Federal action 

is needed. H.R. 2851, or Michelle’s Law, was introduced in the 

House of Representatives by Representative Hodes. The bill would 

extend the ability of dependents to remain on their parents’ plan 

for a limited period of time during a medical leave from student 

status and would apply to all health insurance products, whether 

sold to individuals or offered as a workplace benefit, and whether 

or not the employer plan is self-insured. More protective State laws 

would continue to remain in effect. The bill does not disturb underlying Federal protections relating to rights and responsibilities of 

plans, issuers, or individuals. The American Cancer Society estimates that this bill could impact about 2,400 college-age students 

who will be diagnosed with cancer each year. 

A similar bill, S. 400, was introduced in the Senate on January 

25, 2007, by Senators Sununu, Gregg, and Clinton. That bill would 

have a more limited scope than H.R. 2851, however, in that it 

would only apply to employer-provided health insurance. It was referred to the Committee on Health, Education, Labor, and Pensions. No further action has been taken on S. 400. 

HEARINGS

No hearings were held in connection with H.R. 2851 in the Committee on Energy and Commerce. 

COMMITTEE CONSIDERATION

On Wednesday, July 9, 2008, the Subcommittee on Health met 

in open markup session and favorably forwarded H.R. 2851, 

amended, to the full Committee for consideration, by a voice vote. 

On Wednesday, July 16, 2008, the full Committee met in open 

markup session and ordered H.R. 2851 favorably reported to the 

House, amended, by a record vote. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Mr. 

Dingell to order H.R. 2851 favorably reported to the House, amended, was agreed to by a record vote of 40 yeas and 0 nays, with two 

Members voting present. The following is the recorded vote taken 

on the motion, including the names of those Members voting for 

and against: 


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COMMITTEE OVERSIGHT FINDINGS

Regarding clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the oversight findings of the Committee regarding H.R. 2851 are reflected in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The purpose of H.R. 2851 is to ensure continuity of health coverage for students, who because of a serious illness or injury, can 

no longer maintain student status. The purpose is to allow the student to continue coverage on their parents’ insurance plan for the 

duration of the plan year. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

Regarding compliance with clause 3(c)(2) of rule XIII of the Rules 

of the House of Representatives, the Committee adopts as its own 

the estimate of budget authority, entitlement authority, revenues, 

and tax expenditures regarding H.R. 2851 prepared by the Director 

of the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974. 

EARMARKS AND TAX AND TARIFF BENEFITS

Regarding compliance with clause 9 of rule XXI of the Rules of 

the House of Representatives, H.R. 2851 does not contain any congressional earmarks, limited tax benefits, or limited tariff benefits 

as defined in clause 9(d), 9(e), or 9(f) of rule XXI. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate on H.R. 2851 

prepared by the Director of the Congressional Budget Office pursuant to section 402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate on H.R. 2851 

provided by the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, July 28, 2008. 

Hon. JOHN D. DINGELL, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2851, the Michelle’s Law. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Robert Stewart. 

Sincerely, 

ROBERT A. SUNSHINE

(For Peter R. Orszag, Director). 

Enclosure. 


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H.R. 2851—Michelle’s Law 

H.R. 2851 would require that group health plans continue to provide coverage for full-time college students who take a medically 

necessary leave of absence from school. Currently, health plans extend coverage to dependents of family policyholders as long as the 

dependent is either 18 or younger or 22 or younger and enrolled 

at a post-secondary institution. Dependents who are covered by the 

group health plan on the basis of their enrollment at a post-secondary institution may lose eligibility if they take a leave of absence for any reason. H.R. 2851 would create an exception to that 

rule by preventing group health plans from terminating coverage 

if the leave of absence is for medical reasons. 

CBO estimates that H.R. 2851 would have no significant impact 

on the budget. It would have a negligible impact on federal revenues. CBO assumes that less than one percent of students go on 

medical leave of absence annually, of which approximately half are 

covered as dependents under employer-sponsored insurance. Furthermore, many states already require employer-sponsored plans to 

cover dependents up to 22 years of age and older for other reasons; 

students in these states would not be affected by the proposed law. 

This leaves a very small proportion of students enrolled in post-secondary educational institutions to whom the bill would apply. 

An insurer’s cost of covering a college student who goes on medical leave can be significant; for those taking medical leaves of absence, the most common causes are mental disorders, major illnesses such as cancer, drug and alcohol-related problems, and serious trauma. However, due to the small number of students who 

take medical leaves of absence and state requirements that plans 

cover dependents above 22 years of age, the overall cost to group 

health plans would be negligible. 

H.R. 2851 would not impose an intergovernmental mandate but 

would impose a private-sector mandate as defined in the Unfunded 

Mandates Reform Act (UMRA). (The bill would marginally affect 

the budgets of state and local governments only if they chose to 

comply with the bill’s requirements.) The bill would impose a private-sector mandate by requiring group health plans to continue 

the coverage of full-time students enrolled in a post-secondary institution who take a medically necessary leave of absence. CBO estimates that the costs of complying with the mandate would be 

small and would not exceed the thresholds established in UMRA 

($136 million in 2008, adjusted annually for inflation). 

The CBO staff contacts for this estimate are Robert Stewart (for 

federal costs) and Stuart Hagen (for the private-sector impact). 

This estimate was approved by Keith J. Fontenot, Deputy Assistant 

Director for Health and Human Resources, Budget Analysis Division. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates regarding H.R. 2851 prepared by the Director of the Congressional Budget Office pursuant to section 423 of the Unfunded Mandates Reform Act. 


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ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act would be created by H.R. 2851. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional authority for H.R. 2851 is provided in Article I, section 8, clause 3, 

which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian Tribes. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that H.R. 2851 does not relate to the terms 

and conditions of employment or access to public services or accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act of 1995. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section establishes the short title of the legislation as 

‘‘Michelle’s Law’’. 

Section 2. Coverage of dependent students on medically necessary 

leave of absence 

(a) Amendments of ERISA 

This provision would add a new section to the Employee Retirement Income Security Act of 1974 (ERISA) requiring all employerprovided health insurance plans (whether insured or self-insured) 

to continue coverage for a child dependent on a medically necessary 

leave of absence for a period of up to one year after the first day 

of the leave of absence or the date on which such coverage would 

otherwise terminate under the terms of the plan, whichever is earlier. Very small employer plans, those with fewer than 2 participants, are exempted from this requirement. A dependent child is 

described as a dependent under the terms of the plan who was enrolled in the plan on the first day of the medically necessary leave 

of absence and was enrolled as a full-time student at a postsecondary education institution until the first day of the medically 

necessary leave of absence. 

A medically necessary leave of absence is defined as a leave of 

absence (or any other change in enrollment) from a post secondary 

education institution that (1) begins while the child is suffering 

from a severe illness or injury, (2) is medically necessary, and (3) 

causes the child to lose full-time student status under the terms of 

the plan. The bill would require a certification by the child’s attending physician be submitted to the plan or issuer stating that 

the dependent is suffering from a severe illness or injury and that 

the leave of absence is medically necessary. .The bill provides that 

if the child’s attending physician has made this certification, for 

purposes of an administrative or judicial proceeding there shall be 

a rebuttable presumption that the child has met the first two criteria for a medically necessary leave of absence. 


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The bill states that breaks in the school semester can not disqualify a dependent from protection against disenrollment. The bill 

states that benefits cannot be reduced during the medically necessary leave of absence. Ordinary rights under ERISA pertaining 

to items such as appeals, notice, denials, and continuation of 

COBRA coverage would continue to apply. 

(b) Amendments to the Public Health Service Act 

Similar provisions are added to the Public Health Service Act, 

ensuring applicability of the law to insurance carriers and other 

entities in the business of selling health coverage both to employers 

and to individuals. The provisions differ from the ERISA provisions 

described above in the following ways: 

• It clarifies that the protections of the legislation apply to dependents who qualify under the plan as students, not solely those 

who lose full-time student status. This would not require plans to 

cover any particular class of dependent, but only ensure that all 

classes of student dependents covered under a plan would receive 

the protections of the legislation. A plan would not be required to 

cover a full time student as a dependent. Only that if the plan did 

cover a full time student as a dependent than the provisions of the 

bill apply. Similarly, the bill does not require a plan to cover a part 

time student as a dependent. 

• It modifies the definition of medical leave to be the result of 

a ‘‘serious illness or injury’’ instead of a ‘‘severe illness or injury.’’

• It modifies the requirement to provide a physician certification 

so that the child’s ‘‘treating’’ physician must provide such certification instead of the child’s attending physician. 

• It adds a requirement that insofar as plans provide notice of 

the availability of coverage of dependent students, the notice describes that such coverage remains available during medical leave. 

• It removes provisions regarding intra-semester breaks and the 

presumption relating to the burden of proof in legal and administrative proceedings. 

• It ensures that certification by the treating physician is sufficient proof of serious illness or injury and the medical necessity of 

the student’s leave of absence for the protections of the bill to 

apply. 

(c) Amendments to the Internal Revenue Code 

Provisions identical to the ERISA amendments are added to the 

Internal Revenue Code, ensuring the applicability of the law to certain types of health coverage that is not employer sponsored nor 

sold by entities in the business of selling health insurance or 

health coverage; such as church-sponsored plans. In addition, these 

provisions ensure that certain penalties for non-compliance described in the Internal Revenue Code are applicable for entities 

that are found to be in violation of the provisions. 

(d) Effective date 

The bill would become effective for plan years beginning on or 

after one year after the date of enactment. 


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CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 

1974 

SECTION 1. This Act may be cited as the ‘‘Employee Retirement 

Income Security Act of 1974’’. 

TABLE OF CONTENTS 

Sec. 1. Short title and table of contents. 

TITLE I—PROTECTION OF EMPLOYEE BENEFIT RIGHTS 

* * * * * * * 

Subtitle B—Regulatory Provisions 

* * * * * * * 

PART 7—GROUP HEALTH PLAN REQUIREMENTS

* * * * * * * 

SUBPART B—OTHER REQUIREMENTS

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Sec. 714. Coverage of dependent students on medically necessary leave of absence. 

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TITLE I—PROTECTION OF EMPLOYEE BENEFIT RIGHTS 

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SUBTITLE B—REGULATORY PROVISIONS

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PART 7—GROUP HEALTH PLAN REQUIREMENTS

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SUBPART B—OTHER REQUIREMENTS

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SEC. 714. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

(a) MEDICALLY NECESSARY LEAVE OF ABSENCE.—In this section, 

the term ‘‘medically necessary leave of absence’’ means, with respect 

to a dependent child described in subsection (b)(2), a leave of absence of such child from a postsecondary educational institution (including an institution of higher education as defined in section 102 

of the Higher Education Act of 1965), or any other change in enrollment of such child at such an institution, that—

(1) commences while such child is suffering from a severe illness or injury; 


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(2) is medically necessary; and 

(3) causes such child to lose full-time student status under the 

terms of the plan. 

(b) REQUIREMENT TO CONTINUE COVERAGE.—

(1) IN GENERAL.—In the case of a dependent child described 

in paragraph (2), a group health plan (or health insurance coverage offered in connection with such a plan) shall not terminate coverage of such child due to a medically necessary leave 

of absence before the date that is the earlier of—

(A) the date that is 1 year after the first day of the medically necessary leave of absence; or 

(B) the date on which such coverage would otherwise terminate under the terms of the plan. 

(2) DEPENDENT CHILD DESCRIBED.—A dependent child described in this paragraph is a beneficiary under the plan who—

(A) is a dependent child, under the terms of the plan, of 

a participant or beneficiary of the plan; 

(B) was enrolled in the plan or coverage as of the first 

day of the medically necessary leave of absence involved; 

and 

(C) was enrolled as a full-time student at a postsecondary 

educational institution (as described in subsection (a)) until 

the first day of the medically necessary leave of absence involved. 

(3) CERTIFICATION BY PHYSICIAN.—Paragraph (1) shall not 

apply to a group health plan (or health insurance coverage offered in connection with such a plan) unless certification by the 

child’s attending physician is submitted to the plan or issuer 

stating that the dependent child is suffering from a severe illness or injury and that the leave of absence is medically necessary. 

(c) NO LOSS OF FULL-TIME STATUS DUE TO BREAK IN SEMESTER.—Any breaks in the school semester shall not disqualify a dependent child described under subsection (b) from coverage under 

this section. 

(d) NO CHANGE IN BENEFITS.—A dependent child whose benefits 

are continued under this section shall be entitled to the same benefits as if (during the medically necessary leave of absence) the child 

continued to be a full-time student at the institution of higher education and was not on a medically necessary leave of absence. 

(e) COVERAGE UNDER SUCCESSOR PLAN.—If a plan sponsor 

changes group health plans after the first day of a medically necessary leave of absence of dependent child described in subsection 

(b) but before the date described under subsection (b)(1), and such 

new group health plan offers coverage of beneficiaries as dependent 

children, such new group health plan shall be subject to this section 

in the same manner as the predecessor group health plan. 

(f) PRESUMPTION.—For purposes of administrative or judicial proceedings, upon certification under subsection (b)(3), there shall be a 

rebuttable presumption that the requirements of paragraphs (1) and 

(2) of subsection (a) have been met. 

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PUBLIC HEALTH SERVICE ACT 

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TITLE XXVII—REQUIREMENTS RELATING TO HEALTH 

INSURANCE COVERAGE 

PART A—GROUP MARKET REFORMS

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Subpart 2—Other Requirements 

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SEC. 2707. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

(a) MEDICALLY NECESSARY LEAVE OF ABSENCE.—In this section, 

the term ‘‘medically necessary leave of absence’’ means, with respect 

to a dependent child described in subsection (b)(2) in connection 

with a group health plan, a leave of absence of such child from a 

postsecondary educational institution (including an institution of 

higher education as defined in section 102 of the Higher Education 

Act of 1965), or any other change in enrollment of such child at 

such an institution, that— (1) commences while such child is suffering from a serious illness or injury; 

(2) is medically necessary; and 

(3) causes such child to lose student status for purposes of 

coverage under the terms of the plan. 

(b) REQUIREMENT TO CONTINUE COVERAGE.—

(1) IN GENERAL.—In the case of a dependent child described 

in paragraph (2), a group health plan (or a health insurance 

issuer that provides health insurance coverage in connection 

with a group health plan) shall not terminate coverage of such 

child under such plan or health insurance coverage due to a 

medically necessary leave of absence before the date that is the 

earlier of— (A) the date that is 1 year after the first day of the medically necessary leave of absence; or 

(B) the date on which such coverage would otherwise terminate under the terms of the plan or health insurance coverage. 

(2) DEPENDENT CHILD DESCRIBED.—A dependent child described in this paragraph is, with respect to a group health 

plan, a beneficiary under the plan who—

(A) is a dependent child, under the terms of the plan, of 

a participant or beneficiary of the plan; and 

(B) was enrolled in the plan (or health insurance coverage offered in connection with the plan), on the basis of 

being a student at a postsecondary educational institution 

(as described in subsection (a)), immediately before the first 

day of the medically necessary leave of absence involved. 

(3) CERTIFICATION BY PHYSICIAN.—Paragraph (1) shall apply 

to a group health plan (or health insurance coverage offered by 

an issuer in connection with a group health plan) only if the 

plan or issuer has received written certification by a treating 


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physician of the dependent child which states that the child is 

suffering from a serious illness or injury and that the leave of 

absence (or other change of enrollment) described in subsection 

(a) is medically necessary. 

(c) NOTICE.—A group health plan, and a health insurance issuer 

providing health insurance coverage in connection with a group 

health plan, shall include, with any notice regarding a requirement 

for certification of student status for coverage under the plan or coverage, a description of the terms of this section for continued coverage during medically necessary leaves of absence. Such description shall be in language which is understandable to the typical 

plan participant. 

(d) NO CHANGE IN BENEFITS.—A dependent child whose benefits 

are continued under this section shall be entitled to the same benefits as if (during the medically necessary leave of absence) the child 

continued to be a covered student at the institution of higher education and was not on a medically necessary leave of absence. 

(e) COVERAGE UNDER SUCCESSOR PLAN.—If a plan sponsor 

changes group health plans after the first day of a medically necessary leave of absence of a dependent child described in subsection 

(b) but before the date described under subsection (b)(1), and such 

new group health plan offers coverage of beneficiaries as dependent 

children, such new group health plan shall be subject to this section 

in the same manner as the predecessor group health plan. 

* * * * * * * 

PART B—INDIVIDUAL MARKET RULES

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Subpart 3—General Provisions 

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SEC. 2753. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

The provisions of section 2707 shall apply to health insurance 

coverage offered by a health insurance issuer in the individual market in the same manner as they apply to health insurance coverage 

offered by a health insurance issuer in connection with a group 

health plan in the small or large group market. 

* * * * * * * 

INTERNAL REVENUE CODE OF 1986 

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Subtitle K—Group Health Plan 

Requirements 

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CHAPTER 100—GROUP HEALTH PLAN 

REQUIREMENTS 

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Subchapter B—Other Requirements 

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Sec. 9813. Coverage of dependent students on medically necessary leave of absence. 

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SEC. 9813. COVERAGE OF DEPENDENT STUDENTS ON MEDICALLY NECESSARY LEAVE OF ABSENCE. 

(a) MEDICALLY NECESSARY LEAVE OF ABSENCE.—In this section, 

the term ‘‘medically necessary leave of absence’’ means, with respect 

to a dependent child, a leave of absence of such child from a postsecondary educational institution (including an institution of higher 

education as defined in section 102 of the Higher Education Act of 

1965), or any other change in enrollment of such child at such an 

institution, that— (1) commences while such child is suffering from a severe illness or injury; 

(2) is medically necessary; and 

(3) causes such child to lose full-time student status under the 

terms of the plan. 

(b) REQUIREMENT TO CONTINUE COVERAGE.— (1) IN GENERAL.—In the case of a dependent child described 

in paragraph (2), a group health plan shall not terminate coverage of such child due to a medically necessary leave of absence before the date that is the earlier of— (A) the date that is 1 year after the first day of the medically necessary leave of absence; or 

(B) the date on which such coverage would otherwise terminate under the terms of the plan. 

(2) CHILD DESCRIBED.—A dependent child described in this 

paragraph is a beneficiary under the plan who—

(A) is a dependent child, under the terms of the plan, of 

a participant or beneficiary of the plan; 

(B) was enrolled in the plan or coverage as of the first 

day of the medically necessary leave of absence involved; 

and 

(C) was enrolled as a full-time student at a postsecondary 

educational institution (as described in subsection (a)) until 

the first day of the medically necessary leave of absence involved. 

(3) CERTIFICATION BY PHYSICIAN.—Paragraph (1) shall not 

apply to a group health plan (or health insurance coverage offered in connection with such a plan) unless certification by the 

child’s attending physician is submitted to the plan (or the 

issuer health insurance coverage in connection with the plan) 

stating that the dependent child is suffering from a severe illness or injury and that the leave of absence is medically necessary. 

(c) NO LOSS OF FULL-TIME STATUS DUE TO BREAK IN SEMESTER.—Any breaks in the school semester shall not disqualify a deVerDate Aug 31 2005 14:09 Aug 02, 2008 Jkt 069006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6603 E:\HR\OC\HR806P1.XXX HR806P1

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pendent child described under subsection (b) from coverage under 

this section. 

(d) NO CHANGE IN BENEFITS.—A dependent child whose benefits 

are continued under this section shall be entitled to the same benefits as if (during the medically necessary leave of absence) the child 

continued to be a full-time student at the institution of higher education and was not on a medically necessary leave of absence. 

(e) COVERAGE UNDER SUCCESSOR PLAN.—If a plan sponsor 

changes group health plans after the first day of a medically necessary leave of absence of a dependent child described in subsection 

(b) but before the date described under subsection (b)(1), and such 

new group health plan offers coverage of beneficiaries as dependent 

children, such new group health plan shall be subject to this section 

in the same manner as the predecessor group health plan. 

(f) PRESUMPTION.—For purposes of administrative or judicial proceedings, upon certification under subsection (b)(3), there shall be a 

rebuttable presumption that the requirements of paragraphs (1) and 

(2) of subsection (a) have been met. 

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Æ 


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