If you are healthy and only plan to be out of work for a short time, you might consider a short-term health plan. These policies last for up to three months with an option to renew, and the price is very affordable. Here’s the catch, though – unlike ACA metallic plans, short-term plans:
- Are not guaranteed-issue; you must answer a few medical questions when applying, and your application can be declined.
- Do not cover pre-existing conditions.
- Do not cover preventive care.
- Have an annual and lifetime cap on the amount they will pay.
- Are not considered “minimum essential coverage.” They do not satisfy your coverage requirements under the ACA’s individual mandate.
Still, there are some big advantages to short-term plans, and short-term coverage may soon become a much better option. That’s because, with the elimination of the individual mandate penalty in 2019, healthy individuals who purchase a short-term plan for themselves and their family members do not have to worry about also paying a tax penalty.
Also, the federal government recently released rules that increase the maximum duration of short-term coverage from the current 3 months to almost 12 months (364 days). What this means is that healthy people can purchase short-term coverage effective January 1 with a term of 12 months. If they remain healthy during that 12-month term, they can simply renew their coverage for the next year. If they develop a medical condition during that 12-month period, they can sign up for major medical coverage in the individual market during the ACA’s annual open enrollment period, November 1 – December 15.
