Short-term health plans in Kentucky
- State rules default to the federal duration limits for short-term health insurance in Kentucky.
- New federal rules allow initial terms up to 364 days and total duration of up to three years.
- Kentucky has a variety of state benefit mandates that apply to short-term coverage.
- Kentucky asks insurers to make renewability provisions (or lack thereof) clear to consumers
- At least ten insurers offer short-term health insurance in Kentucky.
Kentucky’s short-term health insurance regulations
The Kentucky Department of Insurance published Bulletin 2018-02 on October 18 that clarifies the state’s regulations for short-term health plans. The bulletin notes that the new federal rules are applicable in Kentucky, so short-term plans can have initial terms of up to 364 days and total duration, including renewals, of up to 36 months. The bulletin also reminds insurers that all short-term plans must include a disclosure to alert consumers of the fact that the coverage is not compliant with the ACA.
In terms of state-specific requirements, the bulletin notes that insurers are still required to file all rates and forms with the Department of Insurance, and comply with the state’s existing benefit mandates, which are detailed in this checklist.
The Kentucky Department of Insurance has also published a consumer alert with FAQs about short-term health plans.
Short-term plans duration in Kentucky
There are no state-specific regulations pertaining to the duration of short-term health insurance in Kentucky, so the state defaults to the federal regulations.
Until October 2, 2018, federal rules (implemented in 2017) limited short-term plans to three months in duration and prohibited renewals. But the Trump Administration finalized regulations in 2018 that allow insurers 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. Insurers may cap their short-term plans at shorter durations, however, and prohibit renewal if they choose to do so.
Soon after the new federal rules were finalized, the Kentucky Department of Insurance indicated that they were reviewing the new federal policy, and would “promulgate a regulation or recommend legislation if the Department determines changes to the federal regulatory requirements are necessary to protect Kentucky consumers.” But as of late 2019, Kentucky has continued to allow short-term plan duration to follow the new federal guidelines in terms of length and optional renewability.
Kentucky Department of Insurance asks insurers to make any renewability provisions clear to consumers
While Kentucky is not requiring short-term plans to be renewable, the Department of Insurance now “strongly recommends” that insurers offering short-term plans “highlight” any details pertaining to renewability. Although the new federal rules allow short-term plans to be renewable (which was not the case under the Obama administration rules that were in effect for much of 2017 and 2018), insurers can still opt to sell plans that are not renewable. Kentucky regulators want insurers to make sure that renewability — or the lack thereof — is made clear to consumers.
Consumers advocates recommended more regulation
The Kentucky Equal Justice Center submitted comments to HHS in March 2018, regarding the then-proposed expansion of short-term health plans. The letter recommended a few steps that states could take to protect consumers, including assessments on short-term insurers to fund reinsurance for the ACA-compliant individual market, requiring short-term plans to have minimum loss ratios, and requiring consumers to complete a marketplace eligibility determination before being allowed to enroll in a short-term plan, to ensure that they understand all of their available options. For the time being, the state has not moved forward with implementing any of those recommendations, and Bulletin 2018-02 takes a fairly hands-off approach to regulating short-term health insurance in Kentucky.
Which insurers offer short-term plans in Kentucky?
- Companion Life
- Everest Prime
- Independence American Insurance Company
- National General
- Standard Life
- UnitedHealthcare (Golden Rule)
Who can get short-term health insurance in Kentucky
Short-term health insurance in Kentucky can be purchased by applicants who can meet the underwriting guidelines the insurers use. By and large, this means being under 65 years old (some insurers use 64 years) and in fairly good health.
Short-term health plans usually include blanket exclusions for pre-existing conditions, so they are not adequate for residents of the Bluegrass State who need certain medical care for ongoing health conditions.
If you’re in need of health insurance coverage in Kentucky, first check to see if you’re eligible for a special enrollment period so you can enroll in an ACA-compliant major medical plan. There are a variety of qualifying life events that will trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Kentucky. These plans are purchased on a month-to-month basis, so you can enroll in coverage even for only a few months until another policy takes effect(with a premium subsidy if you’re eligible).
When should I consider short-term health insurance in Kentucky?
From Bowling Green to Louisville, there may be situations when short-term health insurance is the only option, or the most realistic option:
- You missed open enrollment for ACA-compliant coverage and do not have a qualifying event that would trigger a special enrollment period.
- You’re not eligible for Medicaid or a premium subsidy for an ACA-compliant plan.
People who are ineligible for premium subsidies include:
- Those who earn equal or over 400% of the poverty level. (For 2021 coverage, that amount is $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 lower it).
- People caught in the ACA’s family glitch.
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.