Short-term health insurance is a type of health plan that can provide you with temporary medical coverage when you are between health plans, outside of enrollment periods, and you need some coverage in case of emergency. If you are accepted for an additional period in a short-term health insurance plan, the deductible and other plan amounts are reset to ignore the amounts paid (or the fulfillment of conditions) under the initial plan. Short-term plans also often use post-claim subscription, which means that they will usually take your health status into account when you enroll, but then they can review your medical history as long as you have a claim, to ensure that your request was truthful and to check for any pre-existing conditions. Among other limitations and exclusions, short-term health insurance plans generally do not cover pre-existing conditions (health and other conditions that exist at the time of application) or the minimum essential coverage of the ACA (benefits such as mental health, pregnancy and childbirth, preventive care, etc.).Short-term health insurance plans cover a variety of medical services, surgeries, and outpatient and hospital care.
The Treasury and the IRS are proposing amendments to clarify that payments from employer-provided fixed-compensation health insurance plans (and other similar plans) are not excluded from the taxpayer's gross income if the amounts are paid without taking into account the actual amount of medical expenses incurred. In some cases, this is because state regulations outright prohibit them, while in other cases it's because state regulations are strict enough that insurers have chosen not to sell short-term plans. Although the ACA has largely eliminated medical underwriting from health insurance, short-term plans are not regulated by the ACA and continue to raise some basic questions about medical history to determine if the applicant is eligible to obtain coverage. A short-term health plan can also be used to cover a coverage gap if you have a new job and have a waiting period of up to three months before you are eligible to enroll in your employer's health benefits plan.
In addition, the proposal would clarify that the taxpayer must meet the justification requirements in order to be able to reimburse the qualified medical expenses of any health and accident plan offered by the employer to be excluded from the taxpayer's gross income. Despite the easing of the federal government's rules for short-term coverage, most people should continue to consider these temporary policies as a temporary solution. Short-term health insurance plans are usually less expensive than health plans that meet the requirements of the ACA (also called major coverage health insurance), but they don't offer the same level of coverage. Consumers in many states can now purchase longer short-term plans, but a significant number of states have their own (shorter) limits. Simple claims, modest premiums, and the absence of waiting periods to enroll can make short-term health insurance look like an attractive option for people who don't have affordable access to permanent health insurance.
However, for now, the longer-lasting rules remain in effect, unless a state has taken steps to further restrict short-term health plans...
