Today, the U.S. Departments of Treasury, Labor, and Health and Human Services issued the short-term, limited duration insurance final rule, which finalizes many of the changes in the proposed rule and modifies proposals in other areas. While the three departments finalized the less than 12-month length of the policy as proposed, they changed the total length of the policy to no longer than 36 months in total, taking into account renewals or extensions, based on comments received.
The final rule also retains the requirement that issuers of short-term, limited-duration insurance display prominently in consumer materials one of two versions of a consumer notice explaining the policy that they are purchasing. The departments also strengthened the language required in the notice and included language deferring to state authority. Finally, the departments revised the estimates of the impact of short-term, limited-duration coverage on the individual health insurance market. The final rule is effective and applicable 60 days after publication in the Federal Register. In California, legislation has been introduced — Senate Bill 910 (Hernandez, D-West Covina) — that would prohibit short-term, limited duration health plans from being sold in California.
The final rule is in response to President Trump’s Oct. 12, 2017, Executive Order directing the Secretary of Labor to consider expanding access to association health plans. Additionally, the order directed the Departments of the Treasury, Labor and Health and Human Services to consider 1) expanding coverage through short-term limited duration insurance plans that would not be subject to Affordable Care Act consumer protections and benefit rules, and 2) expanding flexibility and use of health reimbursement arrangements.
CHA commented on the proposed rule, expressing concern about its impact on the health insurance marketplace in California and throughout the U.S.