Buying a short-term plan in Michigan
- Michigan limits short-term plans to 185 days and prohibits renewal.
- You can purchase additional short-term plans, but can’t have more than 185 days of short-term coverage from a single insurer in a 365-day period.
- Michigan’s rules continue to apply, despite the new federal guidelines.
- An insurer that sells individual market coverage can’t have more than 10% of its total individual market premiums attributed to short-term plans
- Legislation introduced in late 2018 would have allowed short-term plans to last for a year and be renewable, but it did not succeed.
- At least five insurers offer short-term plans in Michigan.
Short-term plan duration limited to 185 days in Michigan
Michigan regulations limit short-term health insurance plans to no more than 185 days in duration and prohibit renewal. An applicant can purchase additional short-term plans, but cannot have more than 185 days of short-term coverage from one insurer in any 365-day period.
The Trump Administration’s new regulations allow for longer short-term plans, but are clear in noting that states may continue to impose stricter rules.
So short-term plans are limited to 185 days in duration in Michigan, and applicants are limited to no more than 185 days of short-term coverage in a 365-day period. The Michigan Department of Insurance and Financial Services has confirmed this in an FAQ on their website and in Bulletin 2018-20-INS.
Short-term plans can’t account for more than 10% of an insurer’s individual market premiums
For an insurer that offers plans in the individual major medical market as well as the short-term market, Michigan statute only allows short-term plan premiums to account for up to 10 percent of the total individual market premiums the insurer (or its affiliate or parent company) collects.
But the insurers that offer short-term plans in Michigan generally do not offer other individual market coverage, and the Michigan Department of Insurance and Financial Services confirmed that the no-more-than-10% rule does not apply to insurers that don’t offer regular individual major medical coverage in addition to short-term plans.
Legislation introduced in late 2018 would have allowed for longer short-term plans, but it did not pass
Michigan’s GOP legislature was engaged in an intensive lame-duck session in late 2018, anticipating the incoming Democratic wave in the state. One of the bills introduced in December 2018, SB1224, would have greatly relaxed the state’s restrictions on short-term plans. Ultimately, the bill did not make it to a vote, so it was unsuccessful. But here’s what GOP lawmakers in Michigan were hoping to accomplish:
- SB1224 would have allowed short-term plans to last up to a year and be renewable.
- It would have allowed them to cover pre-existing conditions but would not have required them to do so (most wouldn’t, as that’s a key part of their business strategy; current statute in Michigan does not allow short-term plans to cover pre-existing conditions).
- It would have required short-term plans to cover some essential health benefits: emergency care, hospital services, physician services, lab work, and x-rays. But no other essential health benefit coverage would have been required. Incidentally, those listed benefits are the ones that short-term plans already tend to cover. The ones they often don’t cover, including maternity care, prescription drugs, and mental health care, would have continued to not be required.
- Short-term plans would have had to include a 10-day free-look period. This is an industry standard in most states, but Michigan’s law does not currently require it.
Which insurers offer short-term plans in Michigan?
- Companion Life
- Independence American Insurance Company (IHC)
- National General
- Priority Health
- United Healthcare (Golden Rule)
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.