Federal law caps short-term health insurance policies at 90 days (this may be changing soon). But what happens when your gap between major medical plans doesnct fit neatly into a 3-month period?
You have a few options, including an individual major medical (i.e., Obamacare) plan. (That’s your best choice if you need health insurance that fulfills the Affordable Care Act’s individual mandate.)
But if you’re looking for traditional short-term medical coverage for a longer time period, then keep reading.
Meet the 2 x 3 plan: temporary coverage for 6 months
2 x 3 may not be a formal product name, but it is the industry term for two consecutive 90-day short-term health insurance plans. This option is all about convenience: You apply for and enroll in both policies at the same time. That means the second policy begins when you need it, and you don’t need to shop, apply and enroll again.
Plus, because you apply for both policies at once, any conditions that crop up during your first policy will be covered by your second. If you were to purchase them separately, this would not necessarily be the case.
Here’s how it works:
First, you’ll need to find out if buying 6 months of short-term health insurance at once is an option for you (some states don’t allow it). To find out, ask a health insurance producer or call the customer service number for the plan you are considering.
Once you pinpoint the right coverage, it’s simple.
- Follow the steps necessary to enroll. You will be asked to answer medical questions and sign documents for two separate policies.
- After your coverage begins, you’ll be notified when your first policy is ending and the second one begins.
Why buy 2 short-term plans at once?
When you need health benefits for more than 90 days, buying two back-to-back short-term health insurance plans at once is a way to help you save time and avoid forgetting to enroll in another plan later.
After that, the reasons you might opt to buy short-term health insurance are the same as they typically would be:
- Convenience: You can enroll in short-term health insurance year-round; there is no open enrollment period. Plans can be purchased online within a few minutes, and you can begin your coverage as early as the next day.
- Coverage for large claims: Temporary health insurance is designed with unexpected healthcare expenses in mind. It provides benefits to help with out-of-pocket expenses resulting from previously undiagnosed injuries and illnesses. (There are some short-term plans with limited coverage for certain pre-existing conditions.)
- Premium: The average monthly short-term medical premium in 2018 is $109.1 Premiums vary depending on factors such as the applicant’s age as well as the plan and deductible selected. As with major medical insurance, the general rule is: the lower the plan deductible, the higher the monthly premium and vice versa.
What to know about buying back-to-back short-term policies
Buying short-term health insurance with a 2×3 option can be an efficient way to secure health benefits for up to 6 months, but there are some important things to know before you buy.
- ACA compliance: Short-term plans, whether a 90-day policy or back-to-back policies for 6 months, are not minimum essential coverage under the Affordable Care Act (ACA). Having this type of coverage may provide you with benefits that help cover unexpected medical expenses but will not prevent you from paying a tax penalty if you are not exempt. While some may provide limited benefits for certain pre-existing conditions, most short-term plans do not cover them.
- Cost: The premium you pay for the first policy is not guaranteed to be your premium for the second policy. Your premium for the second policy could change for reasons such as entering another age bracket.
- Cancellation: Maybe it turns out you only need a month of health insurance after all or 5 months ends up meeting your needs. If you need to cancel coverage before your second policy begins, follow the steps required to do so as outlined by that policy. Keep in mind that ending or losing this coverage does not make you eligible for a special enrollment period for an Obamacare plan.
How to enroll in a 2 x 3 plan
The 2 x 3 option may not be available with every short-term plan. You’ll need to talk with a health insurance producer to find it.
If you don’t have access to a 2 x 3 option, you may be able to apply for and enroll in another short-term plan once your current short-term policy expires. Keep in mind that not every state allows back-to-back short-term policies, regardless of how you apply and enroll.
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Where to buy temporary health insurance for 6 months
Not all short-term plans are the same, so it is good to get a quote and compare the different plans available to you to determine which benefits best meet your needs. (Learn more about comparing and selecting the right short-term coverage.)
Short-term coverage isn’t necessarily right for everyone, including those who need to avoid the ACA tax penalty or those who have extensive pre-existing healthcare needs.
Read more about short-term health insurance and get answers to frequently asked questions, then contact a health insurance producer to learn more about your options (including short-term health insurance for 6 months).