Short Term Health Insurance

Short Term Insurance usually covers a time period of 30 days – 36 months. It is very useful for people who are between jobs, have recently been laid off, and those who have recently graduated.

If any of the following statements apply to you, short term insurance may very well be what you are looking for:

Currently uninsured

Your insurance expires soon

You are in between insurance plans either from an employer or individual health insurance

You have applied for health insurance but have not been approved or heard back yet

You are not eligible for individual health insurance due to something that happened more than 3 years ago

You need to make sure you do not break continuity under HIPAA (gaps over 63 days could limit future insurance)

You cannot afford or do not want to pay for other health insurance

You have simply lost your health insurance – for any reason

You believe you would be declined for other health insurance for reasons such as weight

You are moving out of the coverage area for your current health insurance

You are waiting for Medicare benefits

You are in your group or employer’s waiting period

You are interested in looking at new insurance options

You are self-employed

You are an independent contractor

You recently graduated college or will soon

You are currently in college

You are unemployed

Options for short term (gap) coverage:

COBRA – For those who previously had employer-sponsored coverage (group health insurance). Federal law allowing most people to continue group coverage

SHORT TERM POLICIES – For those who are not eligible for COBRA or previously had a self-purchased policy (not through their employer). Non-renewable (have to reapply) coverage you can purchase

COBRA – (Consolidated Omnibus Budget Reconciliation Act of 1985)

Cobra is a Federal law that allows people to continue health insurance coverage for at least 18 months if:

You work for a company of 20 employees or more and quit your job or are laid off.
You were covered through your spouse’s health plan and are now widowed or divorced.
You were covered on your parents’ health insurance policy while you were in college and need coverage until you find a job that offers health benefits. (up to 18 months)

Short Term Insurance Policies

Short term policies are a great option for people who are not or were not covered by their company’s insurance plan. Typical temporary health insurance policies will cover most of the same services as permanent policies do, with some differences.

Most short term policies will not cover preventative care such as check-ups and will not cover visits to the dentist or eye doctor. Short term insurance companies are also known to deny coverage for pre-existing conditions. For example, if you had knee surgery in the past your policy will not cover care for anything related to your knee or if you have had back problems in the past your contract will exclude any care for back pain, etc.

Normal services covered by short-term health insurance include emergency care, prescription drugs, intensive care, lab and x-ray, ambulance, and some home and hospital care. (Policies will vary.) Most temporary health insurance policies can be adapted to extend coverage to a spouse and dependents.

State Plans

Some states have "continuation of coverage" laws that apply to firms with fewer than 20 employees. A few states passed continuation of coverage laws before COBRA was passed and, in general, extend coverage for three to six months, according to Fronstin. To find out whether you're covered, consult your company's human-resources department. Or, check with your state's health department or insurance commissioner.

Individual Plans

Coverage periods are typically brief. Golden Rule Insurance, for instance, offers a short-term major medical plan in which the consumer chooses coverage for one to six months. Fortis Health offers short-term medical plans for 30 to 185 days, says Kathy Quirk, a spokeswoman.

Not all companies do business in all states. Companies usually offer a choice of deductibles ($250, $500 or $1,000, for example) and a choice of major medical coverage (with 80 percent of covered expenses paid or 50 percent of covered expenses paid). Here's one way a temporary plan could work: A 22-year-old woman in Wisconsin who just graduated from college and wants a 60-day, 80/20 major medical plan with a $500 deductible would pay a total, lump-sum premium of $86.40.

Applications for the policies are fairly brief. Generally, no physical exam is required. But if you have pre-existing conditions -- such as heart disease or other serious problems -- you may be denied coverage.

Short-term plans are intended to cover unexpected illness and accidents, not preventive care. If you anticipate still needing coverage after the temporary plan expires, you may be able to apply for a second policy.

To minimize costs, choose a plan with a higher deductible and 50/50 coverage, and pay the premium in a single payment rather than in installments.