short-term health plans
The Biden Administration has proposed regulations that would limit the maximum duration of short-term, limited duration insurance (STLDI) plans.
Currently, STLDI plans can remain in effect for an initial term of 364 days. The plans can be renewed as long as the total duration does not exceed 36 months. Under the newly proposed regulations, STLDI plans can only have an initial term of up to 3 months, and the plans can only be renewed for a period of up to 1 additional month.
Millions of Americans have already lost their jobs due to the coronavirus crisis and some experts say the worst is yet to come. According to a recent Federal Reserve estimate, the coronavirus economic freeze could cost 47 million jobs and send the unemployment rate past 32%.
Illinois state legislators passed a law last month which makes several changes to short-term medical (STM) plans. The most significant change limits the maximum duration of coverage to periods that are less than 181 days (i.e. 180 days). This change applies as of November 27, 2018, which is the date the law was enacted. The immediate effective date did not provide a window of time for insurance carriers to adjust their STM plans to the shorter durations of coverage.
Last week, the Trump administration issued final rules which extend the maximum duration of short-term medical plans (STM plans). STM plans can now have an initial coverage period just shy of one year (364 days). Taking into account renewals, STM plans can have a maximum duration of up to 36 months.
Enter Packaged Health Insurance
- Prior to April 1, 2017, may be issued for longer periods of time so long as the length of coverage does not extend beyond December 31, 2017.
- On or after April 1, 2017, must be limited in duration to periods of less than three months, and that duration includes any renewed coverage.
- ACA reporting had to be submitted for the first time which was an administrative struggle for several employers, but most were able to find a way to get it completed.
- Several Co-Ops, including Land of Lincoln Health, were forced to shut down due to solvency problems.
- Most insurers reduced or eliminated commissions on the sale of individual health insurance plans as a result of profit losses.
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