Maybe. Under a new regulation issued by the Trump Administration, short-term policies can include renewal features that would enable people to continue coverage for up to three years. However, before buying the policy, it would be important to know if the policy is renewable at your option or at the option of the insurance company. If it is only renewable at the insurer’s option, you probably wouldn’t be allowed to renew after you get sick.
It would also be very important to ask about how renewal premiums will be set. Short-term policies in most states are allowed to set premiums, including renewal premiums, based on health status. So if you do get sick, even if you have the right to renew the policy, you might not be able to afford to keep it.
Yes. In general, the application for short-term policies will ask questions about your current health status and your health history. Depending on your answers, if you have or have had a pre-existing condition you might be turned down or charge more. How short-term policies treat you also depends on where you live. A few states have passed laws to prohibit short-term policies from discriminating based on health status.
As the name implies, a short-term health insurance policy offers coverage for a period of less than 12 months. Many offer coverage for just 3 to 6 months. Beyond that term, coverage generally can only be continued if the insurance company agrees. This is sometimes called a non-guaranteed-renewable policy. If you’ve made claims since you bought the short-term policy, the insurer can, and likely will refuse to continue coverage once the policy term ends.
In addition, short-term policies do not offer other protections found in Marketplace plans. For example, short-term policies can exclude coverage of pre-existing conditions. Short-term policies also typically do not cover essential health benefits such as prescription drugs, mental health care, substance abuse treatment, or maternity care.
Grandfathered plans are those that were in existence on March 23, 2010 and have stayed basically the same. If you buy coverage on your own and you first purchased your policy prior to March 23, 2010, it may be a grandfathered plan. If you currently are covered under a non-group policy – whether it is grandfathered or not – you can also explore other qualified plans offered through the Marketplace and, if you prefer, you can switch to a new plan during Open Enrollment. To be eligible for a tax credit to help pay your premium – which will be based on your income – you would have to switch to a plan offered through the Marketplace. Some group plans offered by employers may also be grandfathered plans. A grandfathered group plan also must have been first established prior to March 23, 2010. To retain grandfather status, the group plan cannot be significantly changed (that is, the employer can’t significantly change covered benefits or cost sharing or the share of the plan premium that you are required to contribute.) Because employer plans tend to change from year to year, most have already lost grandfather status or will lose it over time. Meanwhile, however, grandfathered plans are not required to provide all of the benefits and consumer protections required of other health plans. For example, a grandfathered health plan might not cover preventive health services. Employers with grandfathered group health plans are allowed to enroll new employees in the grandfathered plan. So even if you first joined a group health plan after March 23, 2010, you should ask about its grandfathered status. Your employer or your insurer must let you know if your health plan is grandfathered.
All health insurers and employer-sponsored group health plans must provide people with a Summary of Benefits and Coverage, which uses a standard format to outline the benefits, cost-sharing and coverage limits of plans. The Summary of Benefits and Coverage must also say whether the plan meets minimum value and counts as minimum essential coverage.
Most people with health coverage today have a plan that will count as minimum essential coverage. The following types of health coverage count as minimum essential coverage:
Employer-sponsored group health plans
Union plans
COBRA coverage
Retiree health plans
Non-group health insurance that you buy on your own, for example, through the health insurance Marketplace
Student health insurance plans
Grandfathered health plans
Medicare
Medicaid
The Children’s Health Insurance Program (CHIP)
TRICARE (military health coverage)
Veterans’ health care programs
Peace Corps Volunteer plans
Be aware that outside of the Marketplace, other policies be for sale that may look like health insurance (such as short term individual policies, or policies that only cover cancer.) These kinds of products are sometimes referred to as “excepted benefits.” They do not count as Minimum Essential Coverage.
Starting in 2019, there is no tax penalty for people who are not covered by Minimum Essential Coverage.
There is an exemption for people who are incarcerated but it does not apply to people who were in jail awaiting trial.
However, for 2018, you could also claim a hardship exemption because you experienced circumstances that prevented you from obtaining coverage. You can claim this exemption directly on your 2018 tax return, by checking the box on Form 1040, when you file next spring.