New Rule Loosens Current Restrictions
Effective October 2, 2018, a new rule will allow individuals to purchase short-term, limited-duration health insurance coverage for a period of less than 12 months, and renew such coverage for up to 36 months. Under current law, the maximum coverage period for short-term, limited-duration health insurance is less than 3 months, and these policies cannot be renewed.
Notably, short-term, limited-duration health insurance is:
- Not required to comply with the Affordable Care Act's ban on pre-existing condition exclusions and lifetime and annual dollar limits.
- Not required to comply with the Affordable Care Act's essential health benefits requirement, which requires individual health insurance policies to cover, among other things, hospitalizations, emergency services, and maternity care.
- Not "minimum essential coverage," meaning that policyholders may remain liable for an individual mandate penalty for any month in 2018.
Check out our Health Care Reform section for more on the Affordable Care Act.