The Biden-Harris administration has finalized rules that curtail the sale “Short Term Health Plans”. These plans have been an alternative to purchasing health insurance with the Marketplace plans also known as the Affordable Care plans. The marketplace can be a good solution for some since you don’t have to answer health questions to qualify and if your health costs are considered unaffordable versus your income, the federal government provides subsidies to lower your monthly premium.

However, “Short Term Health plans” can be an option for those who can answer health questions to qualify for lower costs on health insurance premiums.

These final rules is set to limit terms on Short-Term Limited-Duration Insurance (STLDI). Under the current standards, STLDIs could be sold for 12 months at a time, with a maximum coverage period of 36 months. The finalized rule reverts to limiting STLDI contracts to no longer than 3 months and sets a maximum coverage period of no more than 4 months, restoring these plans to their original function of providing temporary, stop-gap coverage. While STLDIs can appeal to consumers because they appear to be more affordable than ACA-compliant plans, they come with some restrictions; they can limit coverage amounts, and some do not cover pre-existing conditions. STLDI policies cannot be sold or renewed by the same issuer, or any issuer that is a member of the same controlled group, to the same policyholder within a rolling 12-month period.

Again, here are the rules that will apply starting September 1, 2024:

– As of September 1, “Issuers” (individual insurance companies) are limited to offering 3 months of short-term medical coverage with a 1-month extension to any consumer within a 12-month period.

-After September 1, previous plans sold prior to this date are grandfathered under the previous rules and unaffected by the new changes until the end of their term.

Option available:

Consumers have an option to purchase a new short-term plan prior to this new law change with a term limit of up to 3 years. (Some carriers will have a deadline on July 25, 2024, so it’s best to review your plan options before then.)

Kentucky Health Solutions is dedicated to niche markets and will continue to offer short-term medical and fixed indemnity plan solutions. We will continue to communicate about plans we will have available later this year.

Feel free to contact our office at 859-309-5033 to discuss your specific situation.