Short-Term Limited Duration Insurance Can Now Be Less Short-Term

Short-term, limited-duration insurance was designed as a temporary gap-filler while a person transitions from one kind of health insurance to a different plan or coverage. In 2016, recognizing its serious limitations, an Obama Administration rule mandated that coverage of short-term, limited-duration insurance be limited to three months, including any period of renewal.

But due to a final rule in August 2018 from the Trump Administration, short-term, limited-duration insurance coverage contracts can now last as long as one day short of a year, and can last as long as three years with renewals or extensions. The Trump Administration explained in its final rule that it selected this standard to promote access to choices of health coverage and to individual health insurance coverage. The rule also acknowledged this kind of insurance may not be the most appropriate or affordable for everyone. As of Tuesday, October 2, insurers can sell these “skimpy” plans for the extended duration.

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