The Wagner Law Group
Wagner Law Group, A Professional Corporation, is a nationally
recognized ERISA & employee benefits, estate planning,
employment, labor & human resources practice.
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.
Wagner Law Group
Fax: (561) 293-3591
7108 Fairway Drive
Palm Beach Gardens, FL 33418
East Kennedy Boulevard
Tampa, FL 33602
Francisco, CA 94104
100 South 4th Street, Suite 550
St. Louis, MO 63102
July 14, 2016
Health and Welfare Law
Regulations Significantly Limit Short-term Medical Insurance
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.
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.
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.
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
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.
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.
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