Short-term health plans in Arkansas
- Arkansas defaults to federal regulations for short-term plans.
- Short-term health insurance in Arkansas is allowed to have initial terms up to 364 days, and total duration, including renewal, of up to 36 months.
- Short-term rates must go through the state’s review process and cover certain state-mandated benefits.
- The state’s insurance department has issued consumer alerts about short-term telemarketers, including one in November 2018, after the allowable duration of short-term plans had been extended.
- At least nine insurers offer short-term health insurance in Arkansas.
Arkansas’ short-term health insurance regulations
Arkansas defaults to the federal regulations in terms of the allowable duration of short-term health insurance policies, so insurers can offer plans with initial terms of up to a year, and total duration, including renewals, of up to three years. But the state conducts rate review for short-term plans to ensure that the rates are actuarially justified, and also requires short-term plans to include coverage for some state-mandated benefits.
The Arkansas Insurance Department allows short-term insurers to submit their initial rate filings and implement them without review, but rate changes after that are required to go through the state’s rate review process (short-term rate filings in SERFF indicate that Bulletin 14-2016 and Arkansas statute 23-79-109 are applicable to short-term plan rate filings).
Arkansas also requires short-term plans to cover some state-mandated benefits, but these are not the same as the ACA’s essential health benefits. Some examples of state-mandated medical benefits applicable to short-term health insurance plans are preventive healthcare for children, medical foods, gastric pacemakers, and treatment for loss or impairment of speech or hearing. The applicable statute governing each state-mandated benefit is available on the Arkansas Insurance Department website. The plan description form for short-term health insurance offered by Arkansas Blue Cross Blue Shield illustrates examples of how the various state-mandated benefits are covered.
Arkansas insurance statute also indicates that sections 23-85-105 through 23-85-117 are applicable to all plans sold in the state, but those regulations largely pertain to things like billing, grace periods, and the processing of claims, rather than coverage of medical conditions.
The Arkansas Insurance Department issued a consumer alert in 2016, warning people about “high-pressure telemarketers” who were selling short-term health insurance in Arkansas over the phone and erroneously stating that the plans were ACA-compliant (short-term insurance is, by definition, not regulated by the ACA).
In November 2018, after the allowable duration for short-term coverage had been extended, the Arkansas Insurance Department issued another warning to consumers, noting that short-term plans are not compliant with the ACA, do not cover some of the ACA’s essential health benefits, do not cover pre-existing conditions, use medical underwriting to determine eligibility for coverage, and are limited to initial terms of under 12 months.
Short-term plans duration in Arkansas
Because Arkansas doesn’t impose its own limits on short-term healthcare plan duration, the Trump administration’s regulations apply in Arkansas. Insurers are allowed to provide short-term health insurance in Arkansas with initial terms up to 364 days and the option to renew for a total duration of 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 relaxed those rules, and some of the insurers that offer short-term plans in Arkansas are allowing policy durations of up to 36 months.
Insurers can offer short-term plans with maximum durations that are below the limits allowed under federal regulations. For example, Blue Cross Blue Shield of Arkansas offers basic short-term plans that have a maximum plan duration of 88 days (this used to be the only short-term healthcare product that BCBSAR offered, but they have also begun selling “Complete” and “Complete Plus” plans that have available durations of up to 36 months).
Which insurers offer short-term plans in Arkansas?
As of 2020, there are several insurance companies that offer short-term health insurance policies in Arkansas:
- Arkansas Blue Cross and Blue Shield
- Companion Life
- Everest Reinsurance
- Golden Rule (UnitedHealthcare)
- Independence American Insurance Company
- National General
- QualChoice (QuicChoice)
- Standard Life
- United Security Health and Casualty
The plans offered by these insurers differ greatly from one company to another. And the sort of basic standardization that’s required of ACA-compliant plans does not apply to short-term plans. So carefully consider the benefits that each plan offers, and don’t assume that all companies will offer the same set of healthcare benefits, or that a particular service will be covered by all short-term health plans simply because it’s covered by some of them.
This list includes two insurers — Arkansas Blue Cross and Blue Shield, and QualChoice — that also offer ACA-compliant coverage through the marketplace in Arkansas (ie, Obamacare plans). In many states, there’s no overlap between the insurers that offer short-term coverage and the ones that offer ACA-compliant coverage, but that’s not the case in Arkansas.
Who can get short-term health insurance in Arkansas
Short-term health insurance in Arkansas can be purchased by residents who can meet the underwriting guidelines of insurers. For the most part, this means being under 65 years old (some insurers say 64 years) and in generally good health.
Short-term medical insurance plans are generally less costly, in terms of monthly premiums, than ACA-compliant plans, assuming the person doesn’t qualify for premium subsidies that would offset some or all of the monthly premiums for an ACA-compliant plan. But short-term plans customarily exclude coverage for pre-existing conditions, so these plans are not suitable for someone in the Natural State who needs medical care for ongoing or pre-existing conditions. Short-term health plans are also not required to cover the ACA’s essential health benefits; the most commonly excluded benefits are maternity care, prescription drugs, and mental health care, although various other benefits are often excluded as well. You’ll want to carefully read the details of any policy you’re considering, to make sure you know what’s covered and what isn’t.
If you need health insurance coverage in Arkansas, start by checking your eligibility for a special enrollment period that you can use to enroll in an ACA-compliant major medical plan. A variety of qualifying life events can trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Arkansas.
The plans available through the exchange are purchased on a month-to-month basis, so you can enroll in a plan even if you only need coverage for a few months. So if you’ll soon have coverage under another plan — maybe Medicare or a new employer’s plan — you’ll be able to cancel your marketplace plan when the new coverage takes effect. And if you’re eligible for a premium subsidy through the exchange, you can receive that even if you only need the coverage for a short time.
(Note that the premium subsidy is a tax credit that gets reconciled on your federal tax return based on your household income for the whole year; if your income is going to end up above the subsidy-eligible range due to a new job later in the year, you wouldn’t be eligible for the premium subsidy for the months prior to starting the new job, and would have to repay it on your tax return.)
When should I consider short-term health insurance in Arkansas?
Be it in Fayetteville or Pine Bluff, there are times when a short-term health insurance plan might be the only realistic option, such as:
- If you missed open enrollment for ACA-compliant coverage and do not have a qualifying event that would trigger a special enrollment period.
- You’ll soon be enrolled in Medicare, it’s outside of the annual open enrollment period for ACA-compliant coverage, and you don’t have access to any other coverage in the meantime.
- You’re newly employed and have enrolled in your new employer’s health plan, but have a waiting period before it takes effect (this can be up to three months).
- If you’re not eligible for Medicaid or a premium subsidy in the exchange, an ACA-compliant plan might be unaffordable, and the less costly monthly premiums for short-term plans might be a more realistic option. Folks not eligible for premium subsidies include:
- Those earning more than 400% of the poverty level. (For 2021 coverage, that amounts to $51,040 for a single person. If your ACA-specific modified adjusted gross income is just a little above the subsidy-eligible threshold, there are steps you can take to reduce it).
- People who are caught by the ACA’s family glitch.
- People whose immigration status prevents them from enrolling in a plan through the marketplace (premium subsidies are only available through the marketplace, and enrollees must have a valid lawfully present status in the US in order to enroll through the marketplace).
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.