(By: Brittany Brooks)
A short term health plan is temporary medical coverage for employees who may not be eligible for the employer health insurance you provide. There are a few important details for you to know, e.g., it’s up to the employee to purchase the short-term health plan.
- What they are
- Who they’re for
- What they cover
- And what they do NOT cover
What Are Short Term Health Plans?
Short term health plans (STHP) offer temporary health insurance your employee can use when the health insurance you provide isn’t available to them. The plan gives your employee the ability to visit the doctor without the worry of expensive medical bills due to a lapse in medical coverage.
Depending on your state, plans are available for a duration of 3 months, 6 months, and up to 1 year. Some states allow for STHPs to be renewed for up to 36 months. The plans aren’t required to meet the Affordable Care Act’s requirements, so they may not cover the same benefits as traditional insurance.
There is an underwriting process and the insurance carrier may ask the employee a series of questions regarding their health, leaving space for them to be denied for pre-existing conditions. Don’t let that discourage your employees because these plans do serve a purpose and can be a feasible option if your employee is suddenly without health insurance.
Who Can Use Them?
STHPs aren’t traditionally offered by employers, but your HR department can recommend this option to the appropriate employees when the need arises. Keep in mind, this is used when traditional health coverage isn’t available. Here are a couple of scenarios when you might reference this to an employee:
- When you have a new hire and they’re not eligible for benefits until their probationary period has expired. This employee could purchase a short term health plan to bridge the gap until their eligibility kicks in.
- There’s an employee that’s been working with the company for a while and they never signed up for the group health insurance you offered after their probationary period or they missed the open enrollment 2022 period. Your employee could buy their own STHP to carry them over until they’re registered for your company’s group health insurance.
There are a few other situations when you might suggest a short-term health plan to an employee, but these are the most common.
What Do These Plans Cover?
- Routine doctor’s office visits
- Emergency care
An STHP is cheaper than traditional health insurance, but deductibles may be higher and copays may still be required. Some insurers may have indemnity policies that could restrict the policyholder to a set network. The insurance will cover up to a specified dollar amount and the policyholder is responsible for the remainder of the balance.
What They Do Not Cover?
Since short term health plans aren’t required to satisfy the Affordable Care Act mandate, there are some essential benefits that are not covered under the plan.
Essential Benefits NOT Covered:
- Maternity care
- Mental health
- Substance treatment
STHPs don’t cover prescription drugs either, but some plans may offer a prescription drug discount card and/or cover prescriptions needed during hospital stays.
Check With Your Broker…
To find out if short term health plans are available in your state because they are not available in all states. For instance, the state of New York prohibits the use of short term health plans. New York requires all health coverage plans to be renewable, offer comprehensive medical coverage, and cover essential medical benefits.
Most STHPs can’t adhere to these requirements, so they are not available for purchase within the state. Even though New York employers can’t recommend these plans to their employees, they can put more focus on the employer health insurance they want to provide.
Individual and group health insurance plans are always available and there’s a variety of options out there. Group health policies tend to be more affordable for you and your employees, click here to dig into more details.
If you or one of your employees missed open enrollment 2022 and wants to know where to go from here, connect with Zupnick & Associates for a consultation.