Buying a short-term health plan in Alabama
- Alabama defaults to federal regulations for short-term plans.
- Short-term plans are allowed to have initial terms up to 364 days, and total duration, including renewal, of up to 36 months.
- At least ten insurers offer short-term plans in Alabama.
Alabama defaults to federal short-term regulations
Alabama does not have state-specific regulations for short-term health insurance plans, so the state defaults to the federal regulations. Because Alabama does not limit short-term plans, the Trump Administration’s regulations apply in the state.
Short-term plan duration: up to 36 months
Prior to October 2, 2018, federal rules limited short-term health plans to three months in duration, and prohibited renewal. But the Trump Administration has relaxed those rules.
As of October 2018, insurers are allowed to offer short-term plans with initial terms up to 364 days and the option to renew for a total duration of up to 36 months. A bulletin published by the Alabama Department of Insurance in October 2018 confirms that the new federal rules are applicable in Alabama. But insurers also have the option to offer shorter maximum terms and to prohibit renewal. Some are choosing to offer plans with terms of up to six months, while others are offering 364-day policies.
Although Alabama is allowing short-term plans to follow the new federal regulations, the state’s bulletin reminds consumers that short-term plans are not considered minimum essential coverage, and that the termination of a short-term plan will not grant a person a special enrollment period for ACA-compliant coverage. The bulletin also notifies insurers that they must submit rates and forms via SERFF for the new short-term plans, and reminds agents and brokers that short-term plans are not intended to be a replacement for regular health insurance, but are instead designed to fill in short gaps in coverage.
Which insurers offer short-term plans in Alabama?
- AdvantHealth (American Financial Security Life Insurance Company)
- Aspen Insurance
- Blue Cross Blue Shield of Alabama
- Companion Life
- Everest Prime
- Everest Reinsurance
- Golden Rule (UnitedHealthcare)
- Independence American Insurance Company
- National General
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.