Short Term Major Medical Plans (STM) – Per new regulations, STM plans are now required to be sold in 1-3 month terms as of 4/1/17. This presents a dilemma of per period deductibles every 3 months. President Trump recently signed an executive order to allow these plans to be purchase for up to 12 month terms, but it will take time to update regulations. The effective date of the change is unknown, stay tuned for updates.
Short term health plans have become an alternative for those trying to escape the full costs of an ACA/Obamacare plan. These plans are only suitable for those in good health, and middle to higher income (above 400% FPL), who are considering going UN-insured. Short Term Health Plans are NOT ACA compliant and you may still be subject to the ACA penalty for not having Minimum Essential Coverage (MEC). Many in Arizona are eligible for an exemption from the penalty under the “Affordability Exemption” which states if the lowest cost bronze plan (LCB) is more than 8.05% of your 2018 income (8.16% in 2017), then you are not subject to the penalty for having MEC. (Annual LCB premium / .0805 = maxium income allowed to avoid penalty). Another exemption is now available for those people in a county where only a single carrier is offering ACA coverage. Every county in Arizona for 2017 and 2018 had only 1 carrier availalble. The penalty goes to 0% starting in 2019.
These plans can be utilized by consumers who are considering going uninsured, or who are not eligible for a Special Enrollment Period (SEP) in the Marketplace, and need coverage to hold them over until the next Open Enrollment Period (OEP). These plans can also be a great bridge for consumers who are: between jobs, awaiting group coverage to be effective, or eligible for Medicare in the near future.
STM Disclaimer: THIS IS NOT QUALIFYING HEALTH COVERAGE (“MINIMUM ESSENTIAL COVERAGE”) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES.
National General offers a Flex 4 STM product allowing you to purchase 4 three month term policies at the same time. Plans with $250,000 – $1 million per benefit period available, with flexible deductibles, and ancillary plans to add on. They use the Aetna Choice PPO nationwide network. Plans have a 1 year look back period for pre-existing conditions, and do NOT cover maternity, Rx and other items that can be found in the limitations and exclusion section of your policy.
THIS IS NOT QUALIFYING HEALTH COVERAGE (“MINIMUM ESSENTIAL COVERAGE”) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES.