Short-Term Health Insurance
Short-term health insurance is an insurance policy for a short duration of time with coverage ending when the selected term length concludes. Short-term insurance is flexible and coverage begins quickly, with many plans beginning the next day after purchase. When compared to conventional major medical coverage, short-term plans are typically more affordable.
Short-term coverage is ideal for numerous situations including:
- People who are between jobs or those subjected to a layoff
- Recent college graduates
- Dependents no longer covered by their parents’ insurance plan
- Early retirees
- People who missed the Obamacare open enrollment
- If you live outside of the United States and are on a short visit
- New immigrants
How to purchase a plan
Purchasing a short-term health insurance plan is simple. Many private health insurance companies offer short-term plans. A health insurance broker is another option that can save you time and money as well as serve as an advocate for you, the policyholder. Buying a policy online is another purchase option that is easy, and allows you to compare plans quickly. All major credit cards can be used to purchase your plan.
How to use your insurance
To use your short-term major medical insurance call the plan’s toll-free number listed on your documents and begin the claim process. You will choose the type of claim you wish to file. Some companies use direct billing which will give you access to a PPO network, and co-insurance that will cost less. Other providers may reimburse you after you pay for the medical expenses.
There are several quality providers of short-term major medical insurance; one such provider is Petersen International Underwriters (PIU).
Providing health insurance for 40 years, PIU is still an industry leader. PIU administers their products, and Lloyd’s underwrites the risks. The company maintains a Standard & Poor’s A+ rating, A Fitch rating of AA, and an A.M. Best rating of A.
Applying for coverage with PIU is quick and easy online. The typical form will include:
- Your name, gender, date of birth, country of residence
- Your mailing address
- Questions regarding your citizenship
- Your destination, and whether it includes the US
- Date to begin coverage
- Date to end coverage
- The level of coverage desired
- Method of payment
If you are in the market for quality short-term health insurance, then PIU is undoubtedly a company you may want to investigate.
Short-term health insurance explained
Short-term health insurance is not limited to purchase during open enrollment periods so you can purchase it at any time for periods of 30 days to three months. Most plans will allow you to cancel at any time without a penalty. If you make monthly payments, merely quit paying when you no longer need coverage. A few plans will even refund the unused portion of your premium if you cancel your coverage before the expiration date.
Health plans that are under the Affordable Care Act (ACA) must cap expenses, guarantee acceptance and renewal, not consider pre-existing conditions, and be offered nationwide which usually means they are not cheap. A short-term plan avoids this by providing policies that are less than 365 days in duration with most lasting six months. However, short-term plans do lack comprehensive coverage which might leave you uninsured in the event of a severe health crisis. A medical underwriting test will not be required. If you have a pre-existing condition (depending on the condition), you may or may not be able to get coverage and if you do, the pre-existing condition may not be covered. All short-term plans must advise you that they do not meet the government standards of qualifying health insurance.
A short-term health plan will not protect you from tax penalties as they do not meet the benefit standards of the ACA. The current tax penalty for 2018 is $695 or 2.5% of income for a single person, $2,085 or 2.5% of income for a family with a maximum penalty of $13,100. It is important to realize that continued purchasing of short-term health insurance is not a way to buy less expensive coverage. Each time you re-apply for coverage, you are starting over, and it is up to the insurer whether or not they want to cover you. Any health problems that arose during the previous short-term period may now be considered a pre-existing condition and may disqualify you from coverage. Be mindful that short-term plans are not guaranteed issue, do not cover pre-existing conditions, and do require your answers to a few medical questions. Short-term medical policies do not have any coverage requirements which means that plans will vary in what they cover. So please be aware of the limitations and exclusions of your particular plan. To summarize, short-term health insurance:
- Is temporary
- Does not meet Affordable Care Act standards
- Does not protect you from tax penalties
- Does not cover pre-existing conditions
- Is not guaranteed
- May not cover prescription drugs
- Typically does not cover maternity care
- Does not provide coverage for mental health
- Will not pay for immunizations
However, short-term health insurance may be an option for you. It is meant to provide coverage in between other health insurance options. If you need coverage for a short duration of time, take a look at what a short-term plan can offer for you. Contact us if you have questions.