Nevada Short Term Health Insurance
Recently, the Department of Labor, the Department of Treasury, and the Department of Health and Human Services have issued a proposed rule. This rule will have a significant change in the duration and notices provided with Nevada short term health insurance policies.
Short term health insurance policies have come under scrutiny recently. This is because the plans exploit gaps in the Affordable Care Act’s medical underwriting rules. Short term health insurance policies are not Qualified Health Plans, and, as such, they are not required to provide all of the benefits that are included with Qualified Health Plans.
Qualified vs. Short Term
Qualified Health plans are those plans that are approved by the State Division of Insurance and are sold both in and out of the State health insurance exchange. The Insurance Commissioner makes sure that the Qualified Health Plans sold in their state are in full compliance. They must have the minimum requirements of the Affordable Care Act.
Since short term health insurance policies are not Qualified Health Plans, they do not need approval from the Insurance Commissioner. In addition, short term health insurance plans do not qualify as health insurance coverage. Individuals or families using short term health insurance plans are still subject to the shared responsibility payment. This is a fine for not having health insurance coverage.
New Limits for Short Term
New limitations concerning short term health insurance plans will be coming into effect. This is because there is a belief that short term plans are keeping some of the healthiest consumers out of the Affordable Care Acts single risk pool. Qualified Health Plans use a single risk pool. This means that all of the premiums collected go into one general account in each state. Therefore claims that occur for all of the claims for these consumers result from that single risk pool (account).
The new proposed rule will restrict the maximum term of the short term plans to 90 days. It will also disallow a renewal at the end of the initial 90 day period.
In addition, the company offering the short term health insurance coverage must provide notice to the consumer that:
- The coverage is not minimum essential coverage, and
- The coverage does not satisfy the health coverage requirement of the Affordable Care Act, and
- Short term coverage will not prevent the consumer from owing a tax penalty.
Ultimately, it is the intent of this new rule to help the Qualified Health Plans in each State. The goal is to attract healthier consumers.