The Trump administration released the final rule and fact sheet regarding short-term limited duration insurance (STLDI). This final rule is effective and applicable 60 days after publication in the Federal Register.
Short-term, limited-duration insurance is a type of health coverage that was primarily designed to fill gaps in an individual’s coverage (when they are transitioning from one plan/coverage to another, such as in-between jobs). The plan is also available to those who don’t want or need comprehensive health insurance. These ‘bare-bones’ plans don’t comply with the Affordable Care Act (ACA) and do not have to cover items like pre-existing conditions, prescription drugs, or maternity care.
The new ruling states that STLDI policies are now available for 12 months at a time and can be renewed for up to 36 months. Consumer protections have also been increased, requiring carriers to disclose the type of policy the individual is electing, and notice that these plans don’t offer the same coverage as individual plans under the ACA.
Because these plans lack the minimum essential coverage requirements, they are expected to be 50%-80% cheaper than plans in the individual market. If an individual enrolls in an STLDI for 2019, they won’t face a penalty due to the 2017 tax-reform bill, effectively zeroing out the individual mandate penalty (effective January 1, 2019).
Contact your NIS Representative for more information.
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