Industry News

New Proposed Rule for Short Term Limited Duration Insurance

On Tuesday the 20th of February 2018, the Trump Administration released new proposed rules for Short Term Limited Duration Insurance (STLDI). This is routinely known as STP’s or Short Term Policies. This new proposed rule grows out of President’s Trump’s executive order from October 12th directing federal agencies to expand the STP’s, Association Health Plans and Health Reimbursement Arrangements. The new proposed rules for Association plans have already been released and are in the review period.

The proposed rule for Short Term Policies extends the limits of a short-term policy for no more than three months to less than one year or 364 days. This reverses the Obama administration rules and returns the STD to pre-ACA limits. This new rule would continue the prohibition renewing policies without the carrier’s consent, but would begin permitting renewals with consent.

These plans would continue to fall short of the minimal essential coverage (MEC). While some may believe, this is a moot point with the elimination of the individual mandate, it is worth mentioning that the individual mandate elimination will not go into effect until January 1, 2019.

This proposed rule has entered the comment period. The public has until April 23rd to make comments regarding the proposed rule. At some point after this date the regulatory agencies will publish the final rule with the new rule set to go into effect 60 days after the publication of the final rule. It is important to understand that nothing has changed and nothing will change with the current regulation until the final rules go into effect. Until the new rules go into effect the three-month limitation remains in force.

We will be sure to keep our agents informed on any further developments.

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