Insights

Requirements for Short-term, Limited-Duration Health Policies


On Aug. 9, 2018, Commissioner Wade issued Bulletin HC-121 to reiterate the state’s requirements that relate to short-term, limited-duration health insurance policies. The bulletin states that such plans are considered an individual health policy that must provide essential health benefits (EHBs) and that any plan (including a renewable plan) that’s longer than six months in duration must not exclude coverage for preexisting conditions. In addition, each issued policy must be filed with the state as one of the following: (i) basic hospital expense coverage; (ii) basic medical-surgical expense coverage; (iii) major medical expense coverage; (iv) hospital or medical service plan contract; or (v) hospital and medical coverage provided to subscribers of a health care center.

As background, the HHS and DOL issued final regulations regarding short-term, limited-duration health plans on Aug. 1, 2018. The regulations extend the permissible policy time frame to no more than 12 months (an increase from the previous maximum of three months) and allow such a policy to be renewed or extended for a period of up to 36 months in total. Such short-term policies are exempt from the ACA’s individual market rules, but remain subject to state regulation.

The primary purpose of this bulletin is to remind insurers of the state’s requirements for short-term, limited-duration health policies. Employers should be aware that though these plans may be a lower cost option for individuals that just experienced a separation of employment, it doesn’t change an employer’s obligation to make an offer of COBRA (or state continuation), if otherwise required.

Bulletin HC-121 »