Short-term health plans in North Carolina
- North Carolina defaults to the federal rules for short-term plan durations.
- Short-term health insurance in North Carolina can have initial terms of up to 364 days, and total duration, including renewals, of up to 36 months.
- North Carolina considers short-term plans to be creditable coverage.
- At least nine insurers offer short-term health insurance in North Carolina.
Short-term plan duration in North Carolina
Short-term health insurance in North Carolina follows state statute (§ 58-3-225) which outlines short-term plan duration as described under federal rules (defined in Part 144 of Title 45 of the Code of Federal Regulations).
Until October 2018, the federal definition limited short-term plans to three months in duration and prevented renewal, so short-term plans. But the federal rules were relaxed at that point by the Trump Administration, increasing the availability of short-term plans as a stand-in for comprehensive coverage. Under current federal rules, short-term plans are allowed to have initial terms of up to 364 days, and total duration, including renewals, of up to 36 months. States can set more stringent rules, but North Carolina has opted to default to the federal term limits for short-term health insurance.
North Carolina’s short-term health insurance regulations
North Carolina has various requirements that apply to short-term health insurance plans, as outlined in the state’s rate/form filing guidance for short-term health plans.
North Carolina’s regulations also indicate that an individual would be considered continuously insured (with creditable coverage) if they had short-term coverage prior to enrolling in an employer-sponsored plan, as long as the short-term coverage duration wasn’t more than 12 months.
(Note that federal rules were different pre-ACA, when enrollees could have pre-existing condition waiting periods on employer-sponsored group plans if they hadn’t maintained continuous coverage prior to enrolling in the group plan; that is no longer a factor, as group policies cannot impose pre-existing condition waiting periods even if the person didn’t have prior continuous coverage.)
Which insurers offer short-term plans in North Carolina?
As of 2020, there were at least nine health insurance companies offering (or approved to offer) short-term healthcare coverage in North Carolina, although plan availability varies based on where you live:
- Companion Life
- Everest Prime
- Independence American Insurance Company
- National General
- Pan-American Life Insurance Company
- United Healthcare (Golden Rule)
- United States Fire Insurance Company
Some of these insurers limit the availability of their plans to shorter durations, but some do offer 364-day plans with renewals allowed for a total of 36 months of coverage.
Who can get short-term health insurance in North Carolina?
Short-term health insurance in North Carolina can be purchased by applicants who can meet underwriting guidelines created by participating insurers. This mostly means being under 65 years old (some insurers put the age limit at 64 years) and in fairly good health.
Short-term health insurance plans typically include blanket exclusions for pre-existing conditions, so the plans sold are not adequate for someone who needs continuing or comprehensive medical care. If that describes your situation, it is advisable to seek an ACA-compliant policy that will cover those needs.
It’s also important to pay close attention to the plan details if you’re considering a short-term healthcare policy. Most short-term plans do not cover all of the ACA’s essential health benefits for enrolled members; maternity care, prescriptions, and mental health care are often not covered by short-term plans. Before purchasing a policy, make sure you understand what’s covered and what’s not.
If you need health insurance in North Carolina, your first step should be to check your eligibility for a special enrollment period. There are various qualifying life events that will trigger a special enrollment period and allow you to buy an ACA-compliant (Obamacare) major medical plan through the health insurance exchange in North Carolina (or outside the exchange, although financial assistance is only available if you buy the plan through the exchange). These marketplace plans are purchased on a month-to-month basis, so you can enroll even if you only need the coverage for a few months, and can obtain a premium subsidy for the time that you have the coverage, if your income is in the subsidy-eligible range.
When should I consider short-term health insurance in North Carolina?
There are times when short-term health coverage may be the only realistic option, for example:
- If you missed open enrollment for ACA-compliant coverage and do not have a qualifying event that would trigger a special enrollment period.
- If you’ll soon be eligible for Medicare and are just needing a few months of coverage for unexpected medical events that might arise before you reach the age of 65. Be aware that although Medicare will cover pre-existing conditions regardless of your insurance history, Medigap plans can impose a waiting period of up to six months for pre-existing conditions for which you didn’t have prior coverage. Since most short-term health plans have blanket exclusions for pre-existing conditions, this is something to keep in mind.
- If you’ve recently become employed and signed up for your employer’s health plan, but have a waiting period before it takes effect. Note that if you also have a qualifying event that would allow you to sign up for one of the ACA-compliant insurance policies in your area, you could use that instead of a short-term plan for the time period before your employer’s coverage starts. But if not, a short-term plan might be your only option.
- If you’re not eligible for Medicaid benefits or a premium subsidy on an ACA-compliant plan from the exchange. In this case, the ACA-compliant plans available to you might not be affordable, and a short-term plan might be the most realistic option, despite the less robust coverage.
People who are ineligible for premium subsidies include:
- Folks who earn more than 400% of the poverty level (for 2021 coverage, that amounts to $51,040 for a single person; note that 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 have fallen into the ACA’s family glitch; this happens when employers provide health benefits that are affordable for the employee but not affordable when family members are added to the employer’s plan.
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.