If you will be left without coverage for a small amount of time during the year, a short term plan is an option to fill those gaps. While these policies are not qualified, a short term plan could provide coverage in case something were to happen. The term not qualified means the policies do not follow ACA guidelines. Therefore they are not considered a viable insurance plan to have for the entire year. Since these plans do not have to cover the 10 Essential Health Benefits required by the ACA, the premiums are lower.
Typical reasons for enrolling in a short term plan include:
- Changing jobs and a new employer has a waiting period to enroll in their plan or does not offer health coverage
- Coverage during a waiting period before your qualified plan will begin coverage
- This could happen if you need coverage outside of Open Enrollment and you don't have a Qualified Life Event.
- Waiting for Medicare to begin
- Recent college graduates or coming off of your parent's plan
- The ACA allows children to stay on their parent's plan until the age of 26
- Losing coverage after a divorce
If you would like more information on short term insurance plans, call us at (775) 828-1216. Our contact information can be found here.
Drawbacks of having short term insurance:
- Short term plans are not "Qualified" - Not being enrolled in a "Qualified" ACA plan for the entire year can result in tax penalties
- The coverage provided by these plans is usually very specific. An accident or illness may not be covered
- Please read the policy guidelines
- These plans will ask health questions and modify premiums based on your condition
- Preexisting conditions may be excluded
- If you have preexisting conditions, you may have a higher premium or get denied coverage
- Qualified plans have the same premiums for everyone and do not exclude preexisting conditions
If you are enrolling in a short term plan, it is very important that you go over the plan benefits, exclusions, and limitations. Our office can provide information on where to and how to obtain these plans. Although, we generally do not administer these plans because of the specific information they require to enroll.
It is important to note the current federal legislation to enable short term plans to have 12 month coverage and to increase consumer options. While these laws may pass at the federal level, Nevada state law only allows short term plans to a maximum of 6 months a year. In this case, state law takes precedence over federal law. Therefore, this means Nevada will not recognize 12 month short term plans unless further state regulations are changed. More information on this topic can be reviewed here on our news page.