Short term health insurance, also known as temporary health insurance or short term medical, is an affordable limited-time insurance policy that can fill in gaps of coverage when life situations leave you without an individual health insurance plan. Current federal regulations limit short-term medical plans to 90 days of coverage under one certificate of insurance. Some insurers will allow you to apply for up to three additional new certificates of insurance – with each certificate granting another 90 days of coverage at a time. State rules may vary. Each 90-day coverage period you apply for will have an effective date that starts the next day after a previous 90-day period of coverage expires.
It’s a great option for those who become uninsured due to things like job loss, divorce, early retirement, or other circumstances. You’ll get health insurance coverage during the interim until your new employer coverage begins, you qualify for Medicare or Medicaid, or you find some other means for receiving permanent health insurance coverage.
Applying for a short term health insurance plan is fast and easy, and only takes approximately 24-hours to obtain coverage. It’s also network-free, meaning you can see any physician or clinic you wish, without worrying about a particular doctor being in- or out-of-network. Should you obtain individual health insurance coverage while your short term medical coverage is still in effect, you can contact your health insurance company to cancel at any time.
Short term health insurance is so affordable because it is temporary coverage. However, it is possible to apply for a second short term insurance policy once the original policy terminates. Rules vary state by state, so it pays to check and see if you can enroll in another plan if you life situation is still unresolved by the time your original coverage terminates.
It is important to know that short term health insurance is not considered a “qualified” health insurance plan under the Affordable Care Act, and you could receive a penalty at tax time from the IRS for not carrying a qualified major medical health plan.
Here is a full list of life situations when a short term health insurance plan can fill gaps in coverage:
- Job loss
- Employer eliminates group employee health insurance benefits
- Waiting for new employer health coverage to begin
- COBRA insurance is too expensive
- Getting divorce
- Turning 26 and being removed from parent’s health plan
- New college graduate without health insurance
- Student insurance offered by college or university isn’t adequate (or isn’t offered)
- Missed the open enrollment period to sign up for an Obamacare plan
- Returning from active duty in the military
- Part-time worker who doesn’t qualify for employer health benefits