Short Term Medical Plans



On February 20, 2018, the Trump Administration proposed a new regulation to extend short- term medical plans up to just under a full year. The proposal would reverse an Obama administration decision to limit the duration of short-term health plans to no more than 90 days.

"It's one step in the direction of providing Americans with health insurance options that are both more affordable and more suited to individual and family circumstances," said Health and Human Services Secretary Alex Azar of the proposed regulation.

Opponents of the proposed regulation have concerns that these plans could leave policyholders vulnerable by saying that they will provide more options to people and leave them open to additional risk on uncovered bills and potentially un-insurable in the future on renewing their short-term medical plans. This is because short-term medical plans are not considered Qualified Health Care Plans and can exclude enrollment based on pre-existing conditions.

The proposed regulation follows Congress’ approved tax reform bill that will end the penalty for people who do not carry medical health insurances, starting in 2019.

What is a Qualified Health Plan?

An insurance plan that's certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements under the Affordable Care Act. For example, coverage that meets the four standard coverage levels (“metallic tiers”):

  • Bronze: the plan must cover 60% of expected costs for the average individual

  • Silver: the plan must cover 70% of expected costs for the average individual

  • Gold: the plan must cover 80% of expected costs for the average individual

  • Platinum: the plan must cover 90% of expected costs for the average individual

What are Short-Term Medical Plans?

Short-Term Medical Plans are insurance that provides coverage for a defined period of time and generally has a much lower monthly premium than other forms of major medical health insurance. You can use your Short-Term Medical Plan to pay for services from ANY doctor or hospital. Short Term Medical Plans have no open enrollment restrictions, so you can apply at any time. You will be notified within minutes if your application is approved, and you can use your coverage as early as the next day.

AJM Associates, Inc. will keep you posted on this newly proposed regulation should it be finalized and approved.

Information contained in this Associate Release is not intended to render tax or legal advice. Employers should consult with qualified legal and/or tax counsel for guidance with respect to matters of law, tax and related regulations. AJM Associates, Inc. provides comprehensive benefits advice and administrative services with respect to all forms of employee benefits, individual insurance, Medicare, and ancillary coverage services. For additional information about our services, please contact us at www.ajmassoc.com

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