Rules and Regulations for Offering Short-Term, Limited Duration Insurance

On Sept. 19, 2018, Insurance Commissioner Godfread issued Bulletin 2018-2. The bulletin reminds insurance companies of the North Dakota rules and regulations that apply to short-term, limited duration policies issued in ND. As background, the federal government issued final regulations on short-term, limited duration health plans on Aug. 3, 2018. ND limits such policies to a period of no more than 12 months, which means only one renewal of a six month policy will be allowed.

This bulletin reminds insurers that the Insurance Department will require insurers to refile for all short-term, limited duration policies by Oct. 8, 2018. In refiling, the insurers will have to certify that they have amended these policies to come into compliance with federal and state law.

The bulletin reminds insurers that ND requires these policies to have no more than a 55 percent loss ratio. Additionally, the bulletin provides the state’s required disclosure, which must be in large print and placed on the front cover page of the policy, the certificate of coverage, and the application. The bulletin also identifies the questions that must be answered on the application as well as the requirement for the marketing materials to be filed with the Department by Oct. 8, 2018.

Additionally, the bulletin states that short-term, limited duration policies may only be sold by an appointed producer whose signature and identification number must be included on the application.

This bulletin reminds 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 2018-2 »