New Federal Rules Limit Short-Term Insurance Plans, Enhance Protections
By Emma Freer

Following advocacy by the Texas Medical Association, the U.S. departments of Health and Human Services (HHS), Labor, and the Treasury recently issued final rules that strengthen consumer protections related to short-term, limited-duration insurance.  

Specifically, the rules: 

  • Limit such short-term plans to four months, down from three years; and 
  • Require short-term and fixed-indemnity plans – the latter of which provide policyholders with a fixed cash payment for a health care event – to include a clear consumer notice on marketing, application, enrollment, and reenrollment materials.  

TMA pushed for these policy changes, most recently in a September 2023 comment letter to U.S. HHS Secretary Xavier Becerra regarding the departments’ proposed rules. 

For example, TMA supported a reduction in the maximum short-term insurance coverage period, citing its previous opposition to the departments’ extension of that period – from three months to three years – in 2018.   

“[T]hese plans serve better as a short-term bridge between comprehensive coverage than as a substitute for [it],” TMA President Rick Snyder, MD, wrote. 

The association added that the shorter maximum coverage period would mitigate “the potential for consumers to mistake these plans for ... [such] comprehensive coverage.” 

TMA also supported federal notice requirements while pushing the departments to do more to dispel consumer confusion, such as mandating that short-term plans explain the limits of their coverage compared with Affordable Care Act (ACA)-compliant plans, among other steps. 

Enrollment in ACA-compliant plans continues to grow, according to a March HHS report. More than 45 million Americans – a record high – now are covered under federal marketplace and Medicaid expansion plans.    

For assistance related to insurance payments, check out TMA’s free Payment Resource Center.  

Last Updated On

April 17, 2024

Originally Published On

April 17, 2024

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Emma Freer

Associate Editor

(512) 370-1383

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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