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Industry > Health Care Guidance > Short-Term, Limited Duration Health Insurance Plans Guidance

Background: Idaho and Pre-ACA Federal Law

Idaho statute (Title 41, Chapter 22, Chapter 47 and Chapter 52) limits short-term coverage to 12 months or less in duration. The same chapters also define short-term coverage as non-renewable. Because they are non-renewable, short-term coverage does not meet the definition of a “health benefit plan” and is not subject to all of the requirements that health benefit plans must meet.

Bulletin No. 03-1, Sale of Short-Term Health Insurance Coverage, addressed the issue of renewability. The Bulletin clarified that Idaho insurance law prohibits the renewal or reissuance of short-term coverage; any renewals or reissuances of short-term coverage have the effect of causing the plan to become subject to all of Idaho’s requirements applicable to individual and small group coverage, including guaranteed renewability and prohibitions against preexisting condition exclusions.

Until late 2016, federal law and regulation also defined short-term coverage (“Short-term, limited-duration insurance” or “STLDI”) as having a duration of less than 12 months after the original effective date of the contract. Such coverage is not considered to be individual health insurance coverage and is not subject to federal provisions specific to the individual health insurance market.

Post-ACA Related Changes to Federal Law

2016: On October 31, 2016, a final rule was published that changed the federal definition of STLDI, found at 45 CFR 144.103 Link outside of State of Idaho. Such coverage was newly defined as “having an expiration date…that is less than 3 months after the original effective date of the contract.” Additionally, the updated regulation imposed a requirement for the carrier to include a disclosure, in the contract and any application materials, that short-term coverage does not constitute minimum essential coverage (MEC), and that the consumer could face a tax penalty due to the lack of MEC.

2018: On August 3, 2018, a final rule concerning STLDI was published in the Federal Register. The effective date of the final rule is October 2, 2018.

This federal rule accomplishes the following:
  • Changes the federal definition of STLDI back to the pre-2016 language to allow for coverage lasting less than 12 months, rather than less than 3 months.
  • Allows for renewals of STLDI if state law permits; if renewals are allowed, the total duration of the coverage must be no longer than 36 months.
  • Requires a written disclosure that the STLDI coverage is not considered Minimum Essential Coverage (MEC), and therefore a tax penalty could result from not having MEC in 2018.
Current Guidance for Idaho Carriers

Maximum duration of short-term coverage: The 2018 final rule states that a STLDI may provide coverage for a period of “less than 12 months” while Idaho Code considers short term plans to be a duration of “twelve (12) months or less.” See Idaho Code §§ 41-2221(2)(a), -4703(15) and -5203(12). Idaho law is preempted to the extent that the maximum term for a short term plan is “less than 12 months.” Thus short-term plans may provide coverage for a maximum period of 364 days or less than 12 months.

Prohibition of renewals: In accordance with Idaho statutes, administrative rule and bulletin, short-term coverage must NOT be renewed or reissued. A carrier cannot renew, reissue or otherwise extend short-term coverage to provide continuous coverage for 12 months or longer. Likewise, a carrier cannot issue to an individual a short-term policy with an effective date within 60 days of the termination of short-term coverage of the individual by the same carrier; such issuance is considered to be a renewal or reissuance.

Disclosure requirements: Bulletin No. 03-1, citing IDAPA 18.01.30, requires that short-term policies include a nonrenewal provision of the first page of the policy, so that consumers understand that they cannot renew the policy. Short-term policies issued to Idaho consumers must also contain the required federal disclosure language, in at least 14 point type, informing consumers that these policies are not MEC. For short-term policies with an effective date prior to January 1, 2019, the required language is:

This coverage is not required to comply with certain federal market requirements for health insurance, principally those contained in the Affordable Care Act. Be sure to check your policy carefully to make sure you are aware of any exclusions or limitations regarding coverage of preexisting conditions or health benefits (such as hospitalization, emergency services, maternity care, preventive care, prescription drugs, and mental health and substance use disorder services). Your policy might also have lifetime and/or annual dollar limits on health benefits. If this coverage expires or you lose eligibility for this coverage, you might have to wait until an open enrollment period to get other health insurance coverage. Also, this coverage is not “minimum essential coverage.” If you don't have minimum essential coverage for any month in 2018, you may have to make a payment when you file your tax return unless you qualify for an exemption from the requirement that you have health coverage for that month.

For short-term policies effective January 1, 2019 or later, the federal disclosure language is as follows:

This coverage is not required to comply with certain federal market requirements for health insurance, principally those contained in the Affordable Care Act. Be sure to check your policy carefully to make sure you are aware of any exclusions or limitations regarding coverage of preexisting conditions or health benefits (such as hospitalization, emergency services, maternity care, preventive care, prescription drugs, and mental health and substance use disorder services). Your policy might also have lifetime and/or annual dollar limits on health benefits. If this coverage expires or you lose eligibility for this coverage, you might have to wait until an open enrollment period to get other health insurance coverage.

Licensing and filing requirements: Prior to offering short-term plans to Idaho residents, all carriers must be licensed for disability with the Idaho Department of Insurance. All short term insurance plans forms and rates must be filed with the Department before being offered or advertised for sale to Idahoans.

Required benefits: Short-term coverage is not required to provide Essential Health Benefits, nor is it subject to any other requirements of the ACA. Short-term insurance plans must comply with all requirements applicable to major medical health insurance plans found in Title 41, Idaho Code, including (but not limited to) Chapters 18, 21, 22, 42 and 59, as well as IDAPAs 18.01.24, 18.01.29, 18.01.30, 18.01.31, except where specifically exempted from compliance.


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