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Your Short Term Health Buyers Guide

We're sure you are aware...

the cost of health insurance has gone through the roof!

For this reason (and many others), many people are turning to short term or interim coverage.

It can be a good move depending on the situation.

Health insurance is never easy so it helps to have it all laid out in front of you.

A simple explanation to make a good decision.

Those are our marching orders!

Here's the result.

Your Buyer's Guide to Short term health insurance.

The pro's. the con's. Hopefully, the savings!

Let's get started!


What is Short term health insurance

It has many names.
Short term
interim health coverage
bridge coverage

All the same thing.

 

Basically, it's health insurance designed with these attributes:

  1. Cover major or catastrophic health issues
  2. Offer coverage for a specific period of time
  3. Easy and fast enrollment with quick effective dates
  4. Simplified medical underwriting - not guaranteed issue

 

Short term coverage is designed to fill in a gap of coverage. It can start as early as midnight following online app submission.

 

On the current market, you have two types of REAL coveragey.

ACA compliant health plans on and off exchange
Short term health insurance which is medically underwritten

We'll get into how to compare these two plans in Section 4 later.

Short term has become very popular since 2014 for the following reasons:

  1. People miss Open Enrollment and are unable to get an ACA plan
  2. Short term is generally much less expensive than the ACA plans
  3. Short term addresses gaps in coverage for students, people changing jobs, and more

 

One important note.

Short term plans are not ACA compliant so a person may still be subject to the penalty for not having health insurance.

If a person is eligible for an ACA compliant plan, we can compare the ACA plan with the tax credit versus the short term coverage.

We can help with this comparison.

Just run your quote for permanent and short term coverage here.

Keep in mind that short term is not Guaranteed renewable. This means that a policy has a maximum amount of time that it can be active.

It will then cancel and likely require re-applying based on health.

Again, short term is really designed to cover a person during a gap in coverage.

Let's look at the most common uses of Short Term coverage.


When does Short term coverage work well?

Here are the most common scenarios in which we see short term working well:

  1. Company insurance waiting periods
  2. Missed Open Enrollment and need coverage till next one
  3. Students between insurances
  4. ACA plans are unaffordable even with tax credit included
  5. Very short durations such as 30 days until new coverage starts

These are the most common but definitely not the only ones.

 

We've written an entire article on the uses of short term coverage here but we're happy to help you with your situation.

 

Basically, short term works when a person needs coverage from a given date to a given date (generally under 12 months depending on the plan).

Everyone's different and we want to make sure to get the most affordable coverage!


Basic benefits and rules of Short term

Let's simplify the basic rules of short term health coverage

 

Bullet-point it!

 

 

  1. Simplify issue - fast online enrollment
  2. Medically underwritten - most people can qualify with more relaxed qualification
  3. Can pick effective date as early as midnight following enrollment
  4. Choice to pay monthly or for entire period (may have discount for this option)
  5. Choice of deductibles and max out of pockets
  6. Renewal monthly up to a maximum number of months
  7. Not ACA compliant, will be subject to ACA penalty
  8. Usually 20-40% less expensive that ACA plan
  9. End of short term coverage is not SEP qualified event
  10. More catastrophic coverage, limited copays and generally does not cover RX
  11. Generally requires association fee to enroll

These are the highlights.

Let's address some key issues.

You will need to answer a few health questions to qualify for short term coverage but 80%+ applicants are approved.

These plans are generally meant to cover more catastrophic health care needs.

It's really

for the big bill

during a limited period of time

at a lower cost!

Let's look at how Short Term compares with ACA plans.


How to compare Short Term to ACA plans (on or off exchange)

If available, ACA (Affordable Care Act) plans are the real alternative to consider.

It gets a little more complicated but we'll give you the highlights here.

 

Of course, we can help you in detail at 800-320-6269 - No charge for our services

1. ACA Open Enrollment

The first question is whether you are eligible to enroll in an ACA plan

There are now Open Enrollment windows (generally Nov 1st - Jan 31st)

Anyone can enroll during this time.

Outside of Open Enrollment, you must have a big life change to enroll.

The most common triggers:

  1. loss of employer coverage
  2. Move to/within California
  3. Family change (marriage, divorce, new baby, death, etc)
  4. Change in legal or residency status

We can help you figure out if you do qualify for a SEP (Special Enrollment Period)

Many people buy short term because they missed Open Enrollment and do not qualify for an SEP

2. Tax Credit for ACA plan

The second question is whether you will qualify for a tax credit.

This is mainly based on income and # of family members

We can quickly size up if you're eligible for a tax credit at 800-320-6269

 

General tax credit guidelines here:

 

 

Here's the net net...

If you're eligible to enroll and you're eligible for a tax credit, ACA plans probably make more sense.

Again, we can run both quotes for you or you can quote both options here:


If you are not eligible to enroll, Short Term may be the only option for actual health insurance

Be careful of aggressively marketed plans that are much cheaper but are not ACA compliant or short term.

They are almost always too good to be true.   Ummm...they ARE!

One important note if you are not enroll in an ACA complaint plan (including Covered Ca):

You will still have a tax penalty with the short term plan which is $695/adult or 2/5% of income; whichever is higher.

Even with the penalty, many people find the short term plans to be cheaper.

 

3. Benefit difference between Short term and ACA

 

The ACA plans cover more basic benefits than Short Term.

Again, short term is designed for catastrophic coverage.

We go into more detail on the differences in our ACA versus short term articles

To run your quote for both, call 800-320-6269 or click here


Quick list of pro's and con's for Short term

Here's the recap of benefits and negatives for short term coverage

 

 

Benefits:

  1. Can enroll any time of the year
  2. Fast process with effective date as soon as midnight following application
  3. Lower-priced, more catastrophic type coverage
  4. Can cancel month to month or pre-pay for period of time (generally with discount)
  5. Good for covering in-between times or until Open Enrollment

Negatives:

  1. Not ACA compliant, will have the penalty
  2. Must qualify based on health (but with simplified questions)
  3. Will eventually time-out and require re-applying (based on health)
  4. More catastrophic coverage - few copays for office and no RX coverage
  5. Will eliminate Special Enrollment trigger if enrolled

Short term has a very defined role and it works great for that role!


How to quote and enroll in Short term

 

This is easy. You can quote Short term coverage instantly and online here.

 

You'll see all the benefits and rates available to you and even be able to enroll online immediately for the quote page.

You can add dental, vision, and/or life to the short term purchase for a total coverage package and even cancel them separately if need be.

These are the best rates available for short term coverage and there is no cost for our services.

You will be able to quote the ACA plans with tax credit from the same link!


Call us at 800-320-6269 or request your Short Term Health Quote.


Our Services are FREE!

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About CalShortTerm

 

Short term health insurance can be a valuable tool to help protect people during transitional times.  Understanding the pro's and con's of short term insurance versus ACA compliant plans is Invaluable

We are Licensed California Agents with 20+ years of experience helping 1000's of California individuals and families.

Call us. you will be pleasantly surprised 800-320-6269

 
 
 
 
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We'll quickly see if you have the best priced plan available and if you qualify for a tax credit

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