Guidance on Short-Term Limited-Duration Insurance

On September 27, 2019, Director of Insurance Muriel issued Company Bulletin 2019-07 to provide guidance on fully insured short-term limited-duration insurance (STLDI) offered in Illinois. This bulletin is intended to remind carriers doing business in the state that state law isn’t preempted regarding short-term health insurance and, thus, carriers doing business in Illinois must continue to comply with state law.

As background, the federal government issued a rule in August 2018 that extended the initial contract term of STLDI policies issued on or after October 2, 2018, to be no more than 12 months while allowing renewals or extension of such policies of no more than 36 months. Unlike the federal rule, Illinois law limits an STLDI policy to a term that is less than 181 days. Moreover, short-term policies in Illinois cannot be renewed for 365 days after termination with a single issuer, and the insurer cannot issue a different STLDI to the same consumer for a period of 60 days from the expiration of the original policy.

The main purpose of this bulletin is to remind insurers doing business in Illinois that the state retains the right to regulate STLDI coverage. Employers do not need to take any action but may want to be familiar with the state’s individual insurance market requirements.

Company Bulletin 2019-07 »