Short-Term Plans Can Fill Coverage Gaps


Are you between health plans? Many are, including those waiting for a job offer or those who, at age 26, no longer covered under their parents’ plans.

In addition, for a variety of reasons, some may miss open enrollment for Affordable Care Act (ACA) coverage.

A short-term medical plan may offer a solution. Temporary or short-term medical coverage can fill the gap until you are able to obtain coverage through other sources.

Also called term health insurance, a temporary health insurance plan will cover spouses and dependents who meet the plan’s medical requirements. There is a wide range of plans and deductibles available to meet your individual health needs and budget, so it’s important to define these items before you start to look for short-term coverage.

If, for example, you want a plan that includes your current doctors, ensure you know what each plan’s network covers. Also, some plans may cover prescriptions; depending on your individual situation, you may want to check for this option.

One caveat: if you have a preexisting condition, you may not qualify to purchase short-term coverage; medical underwriters will determine your eligibility.

If you qualify, short-term coverage has no waiting period, so you can enroll quickly. Should you drop your coverage, short-term health insurance plans do not impose penalties, and you also can request a refund of unused premiums.

More good news: premiums may be significantly less than those charged for ACA coverage. Also, you may want to check with your insurance agent and your tax advisor to determine whether the short-term coverage you purchase can reduce or eliminate the ACA tax penalty.

As noted, short-term health insurance plans vary widely, so beware of shopping online. At no additional cost to you, you can discuss your needs with a licensed health insurance agent; he or she can help you determine the best plan for your individual situation.