What is Short Term Health Insurance?
Short Term Health Insurance is medical insurance that provides coverage during gaps between regular, long term insurance (like health care plans provided by your employer, for instance).
There are various benefits provided through these plans offered by different insurance providers, allowing you to choose the right coverage for your needs.
Key Facts About Short Term Insurance
1. Short Term health insurance will not prevent the Obamacare tax penalty
These Short Term health insurance plans coverage do not meet the requirements of the Affordable Care Act (“ACA”). This means that you will still need to pay the federal “Shared Responsibility Tax” for any month you don’t have an ACA plan.
2. Short Term insurance plans are not automatically renewable, but instead require you to reapply if you wish to continue coverage
Due to regulations set by the Affordable Care Act regarding non-ACA plans, you are required to submit a new application if you wish to renew your Short Term Health Insurance plan.
3. You can be denied coverage due to pre-existing conditions
Short Term health insurance plans are able to deny applicants coverage depending on the applicant’s current or past health conditions. Insurers will frequently inquire about up to 2 years of medical history.
4. Benefits Covered By Short Term Plans Can Be Limited
Because Short Term health insurance plans do not comply with Affordable Care Act standards, the “Ten Essential health benefits” guaranteed under the ACA do not apply to these plans.
Why Would a Short Term Plan Still Work?
1. Short Term plans can be cheaper an ACA plan, even including the tax penalty
If you are ineligible for Obamacare plan subsidies, Short Term plans may provide acceptable coverage with total costs from premiums and tax penalties that are still lower than ACA plans.
2. Healthy individuals will not need many of the benefits provided by an ACA plan
The ACA’s Ten Essential health benefits provides coverage for services that might never be needed by some people.
3. Pre-existing conditions restrictions do not apply to healthy individuals
Short Term plan limitations on pre-existing conditions won’t impact you If you don’t have any medical issues.
4. You can still get an ACA plan later if you develop a condition that prevents you from reapplying for a Short Term plan
While developing a new medical condition might prevent you from receiving additional Short Term plan coverage, Affordable Care Act health plans cannot refuse to insure you, so you can always switch back if you need to, during the open enrollment period.
5. You might be prevented from buying an ACA plan if you miss the Open Enrollment Period
Insurance plans provided by the Affordable Care Act require that you enroll before their Open Enrollment deadline (with limited exceptions). If you miss the deadline, you will be likely unable to purchase ACA health insurance. Short Term Health plans do not have a deadline for applications so you can enroll whenever you need to.
The 2017 ACA health plan Open Enrollment deadline was January 31, 2017. The Open Enrollment period for calendar year 2018 ACA coverage will be from November 1, 2017 to December 15, 2017.
6. Short Term Health Insurance Flexibility
Short Term Health Insurance enables you to discontinue coverage without any penalties at any time.