Buying short-term health plans in Illinois
- Illinois law limits short-term plans to six months after lawmakers override governor’s veto.
- The state’s insurance department has also warned consumers about marketing tactics in which short-term plans are disguised as ACA-compliant coverage.
- At least ten insurers offer short-term plans in the state.
Illinois law limits short-term plans to six months after lawmakers override governor’s veto
HB2624/SB1737, which was approved by lawmakers in 2018 and sent to the governor in late June, implemented state-level guidelines for short-term health plans. The amended version of the legislation limits short-term plans to durations of less than 181 days and prohibits renewals. In addition, an enrollee cannot purchase a new short-term plan from the same issuer within 60 days of the termination of a previous short-term plan.
The legislation also calls for short-term plans to be sold with prominent warning labels, disclosing the fact that they are not minimum essential coverage, do not cover pre-existing conditions, and do not include coverage for all of the ACA’s essential health benefits.
The legislation was sent to Republican Governor Bruce Rauner on June 29, 2018, and he had 60 days to sign it or veto it. The bill would have automatically become law after 60 days if he had taken no action, but he vetoed it on August 26. In November, however, lawmakers in Illinois overturned Rauner’s veto. The veto override vote in the Senate was unanimous, and there was also very strong support in the House, with an 89-20 vote to overturn the veto.
The legislation is quite extensive and addresses other insurance provisions in Illinois. Most of it, including the provisions relating to short-term health plans, took effect as of when the law was enacted (November 27, 2018).
But as of early December 2018, insurers in Illinois were still marketing longer short-term plans with total durations, including renewals, of up to 36 months. I spoke with the Illinois Department of Insurance about this, and they said they were in the process of sorting this out and were expecting the longer short-term plans to no longer be available as of early 2019. As of late 2019, all of the available short-term plans in Illinois are capped at six months in duration.
Until October 2, 2018, federal rules limited short-term plans to three months in duration and renewals were prohibited. But the Trump Administration’s new rules for short-term plans allow them to have initial terms of up to 364 days, and to be renewable (at the insurer’s discretion) for a total duration of up to 36 months. Until SB1737 was enacted, Illinois was following the new federal rules. But the state’s new, stricter rules supersede the federal rules, so short-term plans are limited to six months in Illinois.
Illinois insurance department: buyer beware
The Illinois Department of Insurance has warned consumers about high-pressure marketing tactics in which short-term plans are sometimes disguised as ACA-compliant coverage.
Which insurers offer short-term plans in Illinois?
- Aspen Insurance
- Companion Life
- Everest Prime
- First Chicago (new as of 2020)
- Golden Rule (UnitedHealthcare)
- Health Alliance Medical Plans
- Independence American Insurance Company
- National General
- Standard Life
- United Security Health and Casualty Insurance Company
Blue Cross Blue Shield of Illinois previously offered short-term plans, but discontinued them in 2016.
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.