On Behalf of NAHU Government Affairs.
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This morning the Trump Administration released a final rule and fact sheet regarding short-term limited duration insurance (STLDI), often referred to as short-term plans (STPs), which will go into effect 60 days from today. The rule was in response to an executive order issued by President Trump on October 12 directing federal agencies to expand the availability of Association Health Plans, STLDI policies and Health Reimbursement Arrangements. The final rule effectively ends the policy established by the Obama Administration in 2016 restricting the length of time for STPs and instead extends eligibility for the plans from a maximum of three months to less than 12 months, with the ability to renew coverage at the end of that period. The proposed rule was released in February and NAHU submitted comments on the proposal.
The final rule restores the maximum duration of STPs to up to 364 days as previously permitted, with the ability to renew for up to 36 months at the carrier’s discretion. The Administration was sure to note that the final rule increased consumer protections (which NAHU requested in our comments), specifically requiring insurers to clearly disclose the type of policy the individual is choosing and that these plans do not offer the same coverage as individual plans under the ACA. Although the Administration expects these plans to be 50% to 80% cheaper than plans in the individual market, they do not satisfy the requirement for minimum essential coverage. However, individuals who enroll in STPs for 2019 will not face a penalty due to the tax-reform bill that passed in December 2017, effectively zeroing out the individual mandate penalties effective January 1, 2019.
HHS Deputy Secretary Eric Hargan hosted a call for stakeholders shortly after the release of the final rule. The Administration believes these plans will be welcomed by individuals who either do not currently have access to choices in the individual market or are left without employer-based coverage for a period of time. Hargan repeatedly noted that STPs will still be regulated by the states, and that state insurance commissioners have the ability to enforce rules that are stricter than the federal regulation. NAHU emphasized state control in our comments to this rule and will be monitoring actions by the states and any efforts taken to adopt rules that may differ from the final rule released today.