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The Wagner Law Group

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 

 

Established in 1996, The Wagner Law Group has 24 attorneys engaged exclusively in employee benefits, estate planning and employment law. Six of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.

 

 

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Boston 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110


Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

Tampa

Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 

 

San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104

 

St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 

 

www.wagnerlawgroup.com

 

 

 

 

July 14, 2016

 

 Health and Welfare Law Alert

 

 

 

 Agencies' Proposed Regulations Significantly Limit Short-term Medical Insurance Availability

 

 

 

IRS, DOL, and HHS have issued proposed regulations that significantly curtail the availability of short-term, limited-duration health insurance plans to consumers. Specifically, the proposed regulations provide that short-term medical insurance policies can neither be written by insurers for longer than three months (instead of the current 12-month period) nor renewed by individuals.

 

Background. The Affordable Care Act ("ACA") implemented certain health insurance market reforms, including prohibiting annual and lifetime limits and coverage exclusions based on preexisting conditions, as well as requiring the provision of prescription drug coverage and free preventive care services. Health insurance plans which fail to meet these market reform requirements do not qualify as minimum essential coverage under the ACA.

 

Short-term health insurance plans are exempt from the ACA's market reform requirements (because they offer coverage for less than 12 months). As such, they often do not provide coverage that regular policies must offer under the ACA's market reforms (e.g., coverage for preexisting medical conditions, maternity care and prescription drugs). Moreover, in the absence of state restrictions, insurers can refuse to sell short-term medical insurance policies to individuals that they deem as being high-risk and can also cap the maximum amount payable under the policy.

 

Short-term medical insurance plans are designed for individuals in need of temporary insurance until they secure a regular policy and are significantly cheaper than regular policies. However, the agencies have determined that some insurers have begun to undermine the ACA by selling these plans as primary health coverage by allowing individuals to continually renew the short-term coverage beyond the current 12-month limitation.

 

Proposed Regulations. The proposed regulations revise the definition of short-term, limited-duration insurance and provide that such coverage "must be less than three months in duration, including any period for which the policyholder renews or has the option to renew with or without the issuer's consent."

 

Additionally, the proposed regulations: (i) confirm that short-term medical insurance does not satisfy the ACA's health coverage requirement, and (ii) require insurers to notify consumers of this fact and explain that they will owe a tax penalty for not meeting the ACA's individual mandate if this is the only coverage they have.

 

The Agencies believe that, in limiting short-term medical insurance coverage, more young adults will begin to purchase coverage through Health Insurance Exchanges ("Exchanges"). Currently, young adults account for only 25 percent of the Exchange population.

 

The proposed regulations are available at: https://www.gpo.gov/fdsys/pkg/FR-2016-06-10/pdf/2016-13583.pdf fits.

 

 

 

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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.