IMPORTANT NOTICE ABOUT SHORT-TERM PLANS:
Short-term health insurance plans are not qualified health plans under the Affordable Care Act (ACA or “Obamacare”) and do not meet the coverage and benefit requirements of the ACA. You cannot receive a subsidy (premium tax credit and/or cost-sharing reduction) under the ACA in connection with your purchase of short-term health insurance and may still owe the tax penalty (the individual shared responsibility payment) under the ACA. Some people may qualify for exemptions from the ACA tax penalty. To learn more visit: https://www.healthcare.gov/fees/
Short-term plans are less expensive
Short-term health insurance plans are generally less expensive than qualified health plans offered on the Healthcare Marketplace. But short-term plans do not offer the same level of coverage.
Short-term health insurance plans are intended for people who do not want or cannot afford major medical insurance or who want a temporary form of limited coverage before they obtain major medical health insurance.
It is also an alternative to bridge the gap if you are not allowed to enroll in a health insurance plan because you missed the deadline during open enrollment. These plans can offer limited protection rather than going without any insurance altogether.
There are limitations
Among other limitations and exclusions, short term health insurance plans generally do not cover pre-existing conditions (health and other conditions that exist at the time of application) or the minimum essential coverage of Obamacare (benefits such as mental healthcare, pregnancy and childbirth, preventive care, etc.).
IMPORTANT NOTE: Short-term health insurance plans are limited in duration and you will stop receiving benefits when the plan expires.
Plan duration and whether you can renew or buy a new plan after plan expiration depends on the plan you choose and the laws in your state. After a short-term plan expires (in some cases, in only 3 months), you must reapply to receive further benefits.
You may need to re-enroll every 3 months
If you are accepted for an additional term under a short-term health insurance plan, the plan’s deductible and other amounts reset so that amounts paid (or the satisfaction of conditions) under the initial plan are ignored.
Similarly, whether you have pre-existing conditions will generally be determined anew as of your approval under the new application. Insurance companies and state laws limit the number of times a short-term insurance policy may be renewed and may restrict your ability to apply for more than one consecutive short-term health insurance plan.
Please review the plan details carefully and policy terms for the maximum coverage period allowed by the plan you select.
Purchasing a short-term insurance plan will make you ineligible for any guaranteed-issue individual health plans commonly referred to as HIPAA plans.
If Short Term Plans Aren’t for You
If you don’t think short-term plans will cover your needs then consider a shared health plan. Shared health plans feel more like regular insurance and they can also extend longer than 3 months without needing to re-enroll.