The Short-Term Plan Final Rule: What You Need to Know
A new federal regulation loosening restrictions around short-term health plans could mean more consumers signing up for insurance plans with little or no coverage for occupational therapy—and not always understanding what their coverage lacks until it’s too late.
What the Final Rule Does
On August 1, 2018, the Departments of Health and Human Services, Labor, and Treasury issued a final rule meant to give people who buy insurance on their own a new alternative to the marketplaces established under the Affordable Care Act (ACA) by allowing short-term, limited-duration insurance to last much longer than it can now. Short-term plans are currently limited to 3 months to keep them from being used as a primary form of health coverage to skirt ACA benefit requirements and consumer protections.
Starting on October 2, 2018, short-term plans will be allowed to last as long as 364 days, and be renewed or extended for up to 36 months.
Short-term plan applications are required to display a notice explaining that they can exclude or cap certain benefits: the disclosure must state that the coverage doesn’t have to comply with ACA requirements and may have annual and lifetime limits, and list a few examples of essential benefits that may not be covered.
Implications for OT
Before the ACA’s reforms, in most states individual health insurance plans could deny, delay, limit, or charge more for coverage based on an applicant’s health status. The ACA’s market rules eliminated those practices, banned annual and lifetime dollar limits, and mandated coverage of 10 categories of essential health benefits—including rehabilitative and habilitative services and devices. Short-term plans are exempt from those market rules.
AOTA is concerned that expanding short-term plans will mean fewer people will have health insurance that is required to cover rehabilitative and habilitative services, including occupational therapy, leading some to forgo the therapy they need. These plans would also make health care less affordable for enrollees who have to pay out of pocket for essential therapy that their “skinny” plans don’t cover, and for consumers in the ACA marketplaces whose premiums rise as their risk pool gets smaller and sicker.
You can read AOTA’s comment letter here: http://www.aota.org/~/media/corporate/files/secure/advocacy/health-care-reform/stldi-comments.pdf.
What’s Next?
Since the federal government released its short-term plan proposal in February, Hawaii, Maryland, and Vermont have enacted laws restricting short-term plans. Massachusetts, New York, and New Jersey already effectively banned them. The final rule makes it clear that states retain the authority to regulate short-term plans, and we expect additional states will tighten their regulations to preserve consumer protections and protect their risk pools. However other states might loosen regulations to smooth the way for short-term plans and other alternatives to ACA-compliant coverage.
You can read more about state options for regulating short-term plans in this comment letter AOTA sent to a National Association of Insurance Commissioners task force: http://www.aota.org/~/media/corporate/files/secure/advocacy/health-care-reform/stldi-comments-to-regulatory-framework-b-task-force.pdf.