Rules Around Short-Term Medical Health Insurance Are Changing. How Does It Affect You?

Short-term medical insurance has always been considered “temporary” coverage for uninsured people due to job loss, an employer waiting period, retiring early before being eligible for Medicare, moving to a new ZIP code, aging off a parent’s plan – the list goes on. However, the definition of “temporary” has been debated for years, including in 2024, and the rules around short-term health insurance are changing. Here are the basics every consumer needs to know about the upcoming updates to the duration length of short-term medical insurance coverage.

Highlights

• Short-term medical insurance, formally known as Short-Term Limited-Duration Insurance (STLDI), was temporary health insurance meant to cover an individual or family for one month, up to 3 years, in certain states.
• Starting September 1, 2024, short-term insurance will be restricted to a maximum of 4 months of coverage (3 months and 1 month extension) with an insurance carrier.
• These changes do not affect STLDI coverages that are already in effect. If a consumer purchased a short-term insurance plan for 36 months on August 30, 2024, or before, they are permitted to keep their coverage for the entire 36 months if they so choose.
• Under the new rule, consumers can purchase additional STLDI coverage after their initial 4-month period if they purchase from a different insurance carrier that is not an affiliate of the company they previously had coverage with.
• These new rules also require companies to display a disclaimer that compares the differences between STLDI and Affordable Care Act (ACA) plans to ensure consumers know the differences between STLDI benefits and more comprehensive ACA insurance before purchase.

Questions and Answers

When has STLDI been limited before?

From 2004 to 2016, STLDI offered coverage for up to 12 months. In 2016, however, the duration was reduced to a maximum of 3 months or less. In 2018, the 3-month rule was appealed, and STLDI was expanded to offer up to 36 months of coverage in select states. This has been the law of the land ever since.

Can I get ACA coverage once my 4 months of STLDI coverage is up?

Maybe. Being covered under an STLDI plan provides no Special Enrollment Period availability to transition to an ACA plan. If the annual Open Enrollment Period has not begun (it runs Nov. 1 – Jan. 15), you are not eligible until Open Enrollment for coverage that would start on January 1^st.    

Can I still buy an STLDI plan from a licensed health insurance broker, even though it is temporary?

Yes! Consumers are encouraged to speak with a broker agent if they have questions about coverage details and exclusions. Consumers can enroll directly online for their temporary insurance needs for up to 12 months with the 1-3-12 solution.

Who in the administration officially announced this new rule?

The new STLDI regulations were formally issued by the U.S. Departments of Health and Human Services (HHS), Labor (DOL), and Treasury. 

How often do these rules change regarding the length of STLDI coverage availability?

 These rules have changed over time from administration to administration. 

1-3-12 Solution

Pivot Health, an independent marketing company, has arrangements with three non-affiliated insurance companies that offer STLDI insurance coverage in many States. To give consumers easier access to STLDI  choices under these new regulations, Pivot Health has developed a consumer solution to offer enrollment through three different non-affiliated carriers to provide 12 months of STM coverage. It is a 1-3-12 solution!

• Consumers can enroll for three coverage periods of 4 months each at one time. 
• If someone develops a new medical condition during one of the policy periods, that condition is not considered to be pre-existing in the other non-affiliated coverage periods. 
• There is no requirement to keep your coverage; cancellations are accepted at any time.

To learn more about Pivot Health’s 1-3-12 solution for short-term medical insurance plans visit our short-term medical page.

Disclaimer: Beginning September 1, 2024, new regulations governing short-term medical limited duration insurance (STLDI) policies (or short-term medical) will take effect. These changes impact the availability, duration, coverage, and renewal options of such policies and may vary by state. See exclusions and limitations for details.