This week, the Department of Health and Human Services, in conjunction with the Treasury Department and the Department of Labor, issued a proposal to increase the time period that an individual can use short-term limited duration health insurance. The proposed rule follows an executive order President Trump issued this fall seeking to expand access to health insurance outside the Affordable Care Act (ACA).
The regulation would essentially reverse a rule the Obama Administration issued in 2016 which put restrictions on short-term limited duration health insurance. The Big “I” raised concerns about the 2016 rule at the time.
Under the proposal, short-term limited duration health insurance would be permitted for up to one year. Currently, the duration of such policies cannot extend beyond three months. The proposal would continue to require clear disclosures that short-term limited duration policies are not required to comply with ACA requirements, such as those related to essential health benefits and pre-existing conditions.
Importantly, the proposal would leave states as the primary regulators for short-term limited duration health insurance plans. Virtually all states have detailed laws and regulations that define and govern the sale of these policies.
The Big “I” generally supports the proposal because restoring the one-year time frame for short-term limited duration health insurance gives states more flexibility to address the health insurance needs of their residents, and also decreases the likelihood of fraud. In 2016, the Big “I” expressed concerns that the three-month timeframe was too restrictive for some state markets and that requiring policies to only be offered on such a short-term basis would make it easier for fraudulent companies to sell fake policies to consumers and then move on before the consumer realized they had been defrauded.
Public comments on the proposal will be accepted through April 23 and a final rule could be enacted later this year.
Jennifer Webb is Big “I” federal government affairs counsel.
