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Short-term Limited Duration Insurance (STLDI)

The Division urges you to be cautious when purchasing health insurance. There are many websites attempting to lure individuals into purchasing plans while disguising them as Affordable Care Act (ACA) compliant policies. While it is up to you to determine if a short-term limited duration insurance (STLDI) policy meets your needs, it is important to understand what you are purchasing.

Short-term limited-duration insurance (STLDI), which is also known as temporary insurance, is a type of health insurance coverage that is primarily designed to fill temporary gaps in coverage which may occur when an individual is transitioning from one plan or coverage to another plan or coverage. Examples would be a limited period between jobs or during the waiting period for employer sponsored group coverage. These policies have long been offered through the non-group (individual) market and through associations.

Short-term insurance plans are designed to protect against unforeseen accidents or illnesses, but typically do not include coverage for maternity, preventive care, prescription drugs, dental, or vision care or cover pre-existing conditions. Short-term plans are not required to comply with the protections in the Affordable Care Act (ACA), which means insurance companies can deny coverage to you if you have pre-existing conditions and they are not required to cover essential health benefits. Insurers can also impose lifetime and annual dollar limits on these policies and may apply a pre-existing condition waiting period on the initial policy as well as policy extensions. Since STLDI plans do not include comprehensive coverage or protections as provided under the ACA, the premiums for the policies are much less expensive.

You currently can a purchase short-term, limited duration policy that:

  • Is less than 12 months;
  • Contains a disclaimer to help you understand the coverage you are getting; and
  • May be renewed for up to 36 months.

Policies with an effective date on or after July 1, 2019, must display the following disclaimer prominently in at least a 14-point type within the policy, on the application and any other materials that are provided:

This coverage is not required to comply with certain federal market requirements for health insurance, principally those contained in the Patient Protection and 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.

The medical underwriting guidelines for short-term insurance policies are more lenient than comprehensive health coverage because the policy does not cover pre-existing conditions. If you have an existing medical condition, you may want to research whether you can extend your current insurance, if available. Employer-sponsored insurance can be extended under government-regulated options commonly referred to as the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) or state continuation (mini-COBRA). If your last coverage was Minimum Essential Coverage (MEC) as defined under the ACA and you lost coverage due to no fault of your own, you may qualify for a Special Enrollment Period (SEP) for an ACA individual policy. You can contact the federal Marketplace at 1-800-318-2596 to determine if you qualify for a Special Enrollment Period. Short-term, limited duration coverage is not minimum essential coverage so expiration of this coverage does not trigger a Special Enrollment Period.

Companies who wish to market short-term limited duration policies must be authorized to do business in the State of Florida. Individual short-term policy forms and rates must be filed and approved by the Florida Office of Insurance Regulation (OIR) prior to being marketed. Group short-term policies, such as an association policy, issued outside of Florida must file their policy forms for informational purposes, but the rates are not approved by the OIR.

When should I consider short-term health insurance?

Short-term medical insurance, also called temporary health insurance, can provide a temporary solution to help fill gaps in coverage. Consider short-term if you are:

  • Between jobs
  • Waiting for other coverage to begin
  • Waiting to become eligible for Medicare coverage
  • Without health insurance, outside of the ACA open enrollment

Can the company ask health questions and deny my application because of my medical history?

Yes, short-term policies are not guaranteed issue.

Do short-term health insurance policies provide coverage for pre-existing conditions?

No, in most cases short-term insurance plans do not cover pre-existing conditions. You should carefully review the company’s definition of what is considered a pre-existing condition when shopping for coverage.

Do short-term plans meet federal requirements of the Affordable Care Act (ACA)?

No, short-term medical insurance plans are not minimum essential coverage and do not provide the same protections under the ACA.

Can I get a tax subsidy to help pay for my short-term health insurance?

No, short-term plans do not qualify for tax subsidies under the ACA.

Are prescription drug benefits required under a short-term policy?

No, these policies are not required to provide prescription drug coverage.

Is there an out-of-pocket maximum for my deductible, co-insurance and co-payment?

No, there are no out of pocket limits for you.

Can I renew this type of health insurance coverage?

An initial policy cannot be issued for longer than 12 months. The company may offer extensions up to 36 months, but this is not required. The company may also impose a pre-existing condition waiting period for the extension policies. If guaranteed availability and renewability of coverage is important to you and your health needs, you may want to purchase health insurance that meets the requirements of the Affordable Care Act (ACA).

What if I purchase a short-term policy, but it expires or I am no longer eligible for coverage? Can I obtain coverage that meets the requirements of the Affordable Care Act (ACA)?

You might have to wait for the open enrollment period to get health insurance coverage. Open enrollment for ACA compliant coverage begins November 1st and closes December 15th for a January 1 effective date.

How else can I tell if I am not getting an Affordable Care Act (ACA) comprehensive medical policy?

You are probably not purchasing a comprehensive medical policy if:

  • The price is too good to be true
  • There are separate, individual policies combined in a package
  • You must join a club or association to obtain the coverage
  • The insurance is being sold along with non-insurance products, such as retail discounts
  • There are lifetime limits on the amount of benefits
  • You did not receive a Summary of Benefits and Coverage as required for an ACA policy

Where can I obtain more information about the Affordable Care Act policies and protections?

The Division has a webpage dedicated to information related to federal health care reform and the Affordable Care Act. Please access the following link to view additional information -  Affordable Care Act Overview.

Purchasing a Short-Term Health Insurance Policy

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