The terms, they may be a-changin’: A primer on proposed changes to short-term medical plans

In February, the U.S. Department of Health and Human Services (HHS) released a proposed regulation to allow short-term, limited-duration insurance (STLDI) policies to have longer contract periods. STLDI policies have been regulated separately from individual health insurance since the Health Insurance Portability and Accountability Act (HIPAA) decreed that STLDI was not individual health insurance. Under the HIPAA framework, consumers use (and issuers sell) STLDI policies as a temporary coverage solution. Under the proposed rule, HHS appears to be repositioning STLDI as an alternative form of individual health insurance, running parallel to the current Patient Protection and Affordable Care Act-compliant individual health insurance market rather than serving as a supplement to it.