Here today. Gone April 1. The rules for short term health insurance are about to change, and they’re changing soon.
Right now, short term medical plans (STM) last anywhere from 30 days to six months—sometimes as long as 364 days, depending on state laws. However, the maximum policy length available is about to change.
March 31, 2017, is the final day on which you can begin a short term plan that lasts longer than 90 days. Starting April 1, short term policies will be limited to a 90-day maximum.
Need short term coverage that lasts longer?
Some things will remain the same, however. You can still reapply for short-term medical coverage with the same carrier after one policy expires.
The Department of the Treasury, Department of Labor, and Department of Health and Human Services in October 2016 announced these rules, which are designed to address the issue of individuals purchasing short term plans as their primary form of coverage. Short term plans do not qualify as minimum essential coverage under the Affordable Care Act, which means they are not guaranteed issue and do not include essential health benefits or meet other ACA requirements.
Yes. While these rules were passed under the Obama administration, they remain in effect.
If you need health benefits for longer than 90 days and do not qualify for a special enrollment period, you may want to consider a hospital indemnity plan. Also known as a fixed-indemnity benefit plan, hospital indemnity coverage will not be limited to 90 days.
These plans are completely separate from major medical insurance and provide a fixed benefit (i.e., set benefit amount) when you incur covered medical expenses related to hospitalization, surgery, chemotherapy and radiation services. Unlike a short term plan, you can keep your hospital indemnity plan if you obtain an Obamacare plan.
 Internal Revenue Service, Employee Benefits Security Administration, and the Health and Human Services Department. “Excepted Benefits; Lifetime and Annual Limits; and Short-Term, Limited-Duration Insurance.” Federal Register. Oct. 31, 2016. https://www.federalregister.gov/documents/2016/10/31/2016-26162/excepted-benefits-lifetime-and-annual-limits-and-short-term-limited-duration-insurance
This document is for general informational purposes only. While we have attempted to provide current and accurate information, this information is provided "as is" and we makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.
SHORT-TERM MEDICAL EXPENSE (STM)
THIS IS A SHORT TERM HEALTH BENEFIT PLAN THAT IS NOT INTENDED TO QUALIFY AS THE MINIMUM ESSENTIAL COVERAGE REQUIRED BY THE AFFORDABLE CARE ACT (ACA). UNLESS YOU PURCHASE A PLAN THAT PROVIDES MINIMUM ESSENTIAL COVERAGE IN ACCORDANCE WITH THE ACA, YOU MAY BE SUBJECT TO A FEDERAL TAX PENALTY. ALSO, THE TERMINATION OR LOSS OF THIS POLICY DOES NOT ENTITLE YOU TO A SPECIAL ENROLLMENT PERIOD TO PURCHASE A HEALTH BENEFIT PLAN THAT QUALIFIES AS MINIMUM ESSENTIAL COVERAGE OUTSIDE OF AN OPEN ENROLLMENT PERIOD. THIS POLICY INCLUDES A PRE-EXISTING CONDITION EXCLUSION PROVISION.
HOSPITAL FIXED INDEMNITY
This is not qualifying health coverage “Minimum Essential Coverage”) that satisfies the health coverage requirement of the Affordable Care Act. If you don’t have Minimum Essential Coverage, you may owe an additional payment with your taxes. The termination or loss of this policy does not entitle you to a special enrollment period to purchase a health benefit plan that qualifies as minimum essential coverage outside of an open enrollment period. This product includes a pre-existing condition exclusion provision.
About The IHC Group
Independence Holding Company (NYSE: IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual specialty benefit products, including disability, supplemental health, pet, and group life insurance through its subsidiaries since 1980. The IHC Group owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company), and IHC Specialty Benefits, Inc., a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss). All products are placed with highly rated carriers.
IHC Specialty Benefits, Inc.
IHC Specialty Benefits, Inc. (IHC SB) is a technology-driven, full-service marketing and distribution company that focuses on small employer and individual consumer products through general agents, telebrokerage, advisor centers, and private-label arrangements. IHC SB conducts business under the following brands: Healthedeals.com; Health eDeals Advisors; Aspira A Mas; and PetPlace.com. For more information about IHC SB visit http://www.ihcgroup.com/companies.