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Short-Term Health Insurance FAQs

Short Term Health Plans
With the deadline now past to sign up for health insurance coverage under Obamacare, the people who failed to obtain qualified coverage will have to wait until November 15 to sign up for coverage that starts January 1st, 2015. What if you need coverage now? There’s one last resort for the millions of uninsured: short-term health insurance.

What Is Short Term Health Insurance?

Short-term health insurance plans give you coverage for a limited period of time. These plans are an ideal solution for those between jobs or those waiting for other health insurance to start, such as retirees who are not eligible for Medicare. Typically, short-term plans offer coverage up to six months, however some plans offer coverage up to 12 months. If you think you’ll need coverage for longer than 12 months, you will want to look at standard individual and family health insurance plans.

The main advantages of short-term health insurance are:

  • Low cost
  • Flexible: 30 days to 12 months of coverage
  • Help bridge gaps during times of transitions

What Short Term Health Insurance is NOT

Short-term health insurance is not considered “minimum essential coverage” under the Affordable Care Act or Obamacare. Even if you have short-term coverage, you may still be subject to the federal tax penalty. In addition, these are not major medical health insurance plans, but it does give you some level of coverage if you have no other option.

What if I only need coverage for less than 30 days?

Most short-term health insurance plans have a minimum coverage period of 30 days. If you need coverage for less than 30 days, you can either:

  • Make a single payment upfront for 30 days of coverage, or
  • Select the monthly payment option, and then cancel your coverage when you no longer need it.
  • Note: you will not be refunded for partial months of coverage.

Is Short-Term Health Insurance Better Than Nothing?

If you are concerned about not having coverage in the event of a terrible accident or a new diagnosis, then yes. However, these plans usually don’t cover routine physicals, can exclude coverage for conditions that have been diagnosed or treated within the past three to five years and have lifetime limits on benefits, which is now prohibited under the Affordable Care Act. You should always read the fine print and know what benefits you will actually be getting in the short-term policy because it may not be as comprehensive as the plans you have had in the past.

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