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You get what you pay for -- “short-term” insurance plans

By Michael Thompson posted 08-03-2018 13:58


Earlier this week the Trump administration announced it will finalize new rules for “short-term” limited duration insurance plans. According to HHS, the new regulations will allow this type of “skinny” plan to last up to a year, and consumers will be able to keep them for as long as three years.


Short-term insurance plans are not subject to the Affordable Care Act's (ACA) regulations, are a cheaper alternative for consumers meant to provide relief to middle-class Americans facing high premiums in ACA-compliant plans, many of whom are leaving the non-group market.


The availability of coverage regardless of health status through ACA, materially impacted employees needs to elect or continue on coverage. These plans may similarly attract people to not take or get off of COBRA, but if the coverage is not comprehensive, it may provide a false sense of security. This can further complicate how employers guide their employees who may otherwise be eligible for COBRA and lead to unintended consequences around continuity of coverage. And it may also steer healthy people away from the ACA and further reduce the risk pool need to a sustainable healthcare system.


Employers/purchasers may want to be prepared for employee confusion.