Requirements for Short-term, Limited Duration Health Policies

On Sept. 14, 2018, Director McPharlin issued Bulletin 2018-20-INS to reiterate Michigan’s requirements that relate to short-term, limited duration health insurance policies. The bulletin states that such plans are limited in duration to 185 days or less out of any 365-day period.

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 MI’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 2018-20-INS »