The new rule will allow individuals to purchase short-term, limited-duration health insurance coverage for a period of less than 12 months, and renew coverage for up to 36 months. Under current law, the maximum coverage period is less than 3 months, and cannot be renewed.

Short-term, limited-duration health insurance is:
• Not required to comply with the Affordable Care Act’s ban on pre-existing condition exclusions and lifetime and annual dollar limits.
• Not required to comply with the Affordable Care Act’s essential health benefits requirement, which requires individual health insurance policies to cover, among other things, hospitalizations, emergency services, and maternity care.

The short-term health plans are typically much less expensive than fully-insured plans found on the marketplace or coverage provided through an employer’s COBRA continuation option. An employee with pre-existing conditions may not be interested, however health employees may find the short-term policies much less expensive and opt for the coverage.


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.