Effective September 1, 2024, the new regulations will limit health plans outside of the marketplace to a maximum duration of three months, with a one-month extension available.
This is a significant shift from the previous rules under the Trump administration, which allowed these plans to last up to three years.
Here are the Implications for Self-Employed Individuals and Business Owners:
- Expanded Health Benefits: Short-term health plans do not offer coverage for maternity, drug & alcohol rehab and therapy related service. They often have limited coverage for preventative services like physicals, colonoscopies and mammograms. Once families transition to ACA compliant plans, families will have access to these services.
- Increased Costs: Short-term health plans have been popular among self-employed individuals due to their lower premiums. With the new restrictions, these individuals will face higher costs as they transition to more comprehensive, ACA-compliant plans.
- Limited Options: The reduced duration of short-term plans means that self-employed individuals will have fewer options for temporary coverage. This may necessitate a shift to long-term health plans, which could be more costly but offer better protection.
- Increased Risk: For families and individuals that are not aware of the changes and do not act or that choose to stay in short term plans, if a major medical event such as a cancer diagnosis or a heart attack happens, they will be left without coverage once their limited duration plan expires in a time when they need critical and often costly ongoing care,
Conclusion
The upcoming changes to short-term health plans represent a significant shift in the health insurance landscape. For self-employed individuals, these changes may mean higher costs but also better coverage and reduced financial risk. Business owners will need to reassess their health insurance offerings to stay compliant and provide valuable benefits to their employees.
As we approach September 1, it’s essential to stay informed and consider how these changes will impact your health insurance strategy.
For personalized advice and guidance, feel free to reach out to our team of experts at team@rwealthgroup.com or by texting or calling (813)761-2836.
References
- Wissig, Erik. “Health Insurance Changes and What They Mean for Self-Employed People and Business Owners.”