The Trump administration just released (August 2018) new rules on Short Term Health Plans which allows them to start with initial coverage dates for up to 364 days with a possibility of two extensions, making them able to be used for up to 36 months.
What are these plans?
These are lower-benefit, lower-cost health insurance plans that can be used for a specific period of time. They are often used to fill in a gap that a person has between their group coverage at a job, or another individual health insurance product.
What’s good about these plans?
They can be used any time of the year and not just during Open Enrollment (OEP) or Special Enrollment Periods (SEP). These plans tend to be much lower in price, giving users more flexibility in coverage options.
What is the down side?
These plans are not ACA (Obamacare) compliant, which means they do not have the same level of benefits. Most will not pay any benefits until the deductible is met, including doctor visits and prescriptions. They won’t cover maternity or many of the wellness visits users have come to expect from traditional plans. They also tend to have higher deductibles and can put users at more risk in the case of an expensive health event.
In short:
Short Term Health plans are designed to be used for a limited amount of time and will not cover all areas of benefits that traditional plans cover. They are a great alternative for healthy people looking to save money on the premiums. The best way to use these types of plans are to pair them with other products like a critical illness, accident or cancer policy.
If you still have questions or want to take a look, please give me a call.
