Short-term health insurance can be used to bridge a temporary gap in coverage. But it is important to understand characteristics of short-term coverage before you buy it.
Now that the window of opportunity to purchase 2014 Affordable Care Act (ACA)-compliant health insurance has closed, many people are wondering how they can be protected in the event of an illness or injury this year.
In most cases, if you did not purchase a 2014 policy before the March 31 deadline, your option for the remainder of 2014 is to purchase what’s known as short-term insurance. (*See notes below for some exceptions.)
What is Short-Term Health Insurance
Short-term health insurance (also known as temporary coverage) has been around for a long time. These are policies typically geared toward recent college graduates, people who may be between jobs, new employees waiting for group coverage to kick in, or anyone else needing coverage for a defined window of time. Just as the name suggests, the coverage is intended to be temporary, for the short term.
Characteristics of Short-Term Health Insurance
If you missed the March 31 deadline to buy a 2014 policy and you are currently uninsured, being covered under a short-term policy is better than having no coverage at all. As you research your options, however, it is important to understand the characteristics of short-term insurance.
- Short-term plans are not subject to the rules of the Affordable Care Act (ACA). Therefore, they typically provide less coverage than ACA-compliant plans. Since they do not meet ACA minimum essential coverage requirements they typically do not cover things like preventive care, immunizations, maternity care, allergies, etc.
- Short-term coverage can be denied for anyone who is sick.
- Pre-existing conditions are usually not covered by short-term policies.
- A short-term policy does not have guaranteed renewal. This means if you buy, for example, a 60-day plan, the carrier is not required to renew your coverage at the end of 60 days. If you get sick during those 60 days, your request to renew can be denied.
- If you get sick during your initial policy period and your carrier does permit you to renew, that sickness is now considered a pre-existing condition under your new policy. Any treatment for that condition will be denied.
- Since they do not meet minimum essential coverage requirements, short-term plans do not satisfy ACA’s individual mandate. This means if you have a short-term policy, you may still be subjected to a tax penalty under ACA.
Should You Buy Short-Term Health Insurance?
If you are reading this during an open enrollment period for health insurance under the Affordable Care Act (Nov 15, 2014 – Feb 15, 2015 for 2015 coverage), we would steer you away from short-term coverage in favor of an ACA-compliant plan with more robust coverage.
However, if you are reading this outside of open enrollment and you are currently uninsured, then we recommend a short-term policy as your best option. After all, if you get sick or are injured and you have no health insurance, the financial impact could be tremendous. Short-term coverage is definitely better than no coverage at all.
How to Buy Short-Term Health Insurance
To research your options for short-term coverage, visit the links below or contact our office for assistance. You can reach us by phone 1-800-867-0800 or email jkatz@vamedicalplans.com.
Remember, short-term coverage is better than none at all. Get in touch with us today!
*If you were “in line” using the federal health insurance exchange (healthcare.gov) on or before March 31, you have until approximately April 15 to complete your application.
*If you experience a qualifying event — e.g., change in marital status, change in job status, certain changes in income, birth/death/adoption of a child — you can purchase an ACA-compliant policy during what is known as a special enrollment period. Click here to read more.
