Compliance Bulletin: Final Rule Expands Short-Term, Limited-Duration Insurance

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On August 3, 2018, the Department of Labor, Health and Human Services (HHS) and the Treasury (Departments) published final regulations amending the definition of short-term, limited duration insurance for the purposes of the Affordable Care Act (ACA). These regulations: 

  • Provide a maximum coverage period of up to 12 months; and

  • Amend the notice to provide additional specificity, including a list of benefits that might not be covered.

In addition, the final regulations allow short-term, limited-duration insurance to continue for up to 36 months in total, taking into account renewals or extensions. 

As a result of these final regulations, issuers can not offer short-term, limited-duration insurance policies that last up to 12 months. According to the Departments, this will provide consumers with more affordable options for health coverage.