Short-term health plans in North Dakota
- North Dakota limits the duration of short-term health insurance plans to no more than 185 days.
- One non-underwritten renewal is allowed, so the plan duration can be up to 12 months.
- New legislation enacted in 2019 requires short-term plan insurers to offer renewal (but with total plan duration still capped at 12 months).
- The state is also requiring insurance producers or insurance companies to record phone calls to prospective enrollees and maintain them on file for a year after the plan terminates.
- North Dakota has regulations for the sale/marketing of plans, and a loss ratio requirement.
- State regulators warn consumers about the shortcomings of short-term health insurance in North Dakota.
- One insurer offers short-term health insurance in North Dakota.
North Dakota’s short-term health insurance regulations
ND 2118 was signed into law in North Dakota in March 2019, following nearly unanimous support in both chambers of the state’s legislature. The new law clarifies some of the state’s existing rules, including the initial term limit of six months. But the legislation also requires short-term health insurers to allow a member to renew their coverage, although the total duration of the plan, including renewal, cannot exceed 12 months.
This is an important provision, as it differs from the federal rules and most other states’ rules. While the new federal rules for short-term plans allow insurers to offer renewal, at their discretion, North Dakota’s new law leaves it to the insured’s discretion — the insurer is required to allow the renewal with no additional underwriting if the insured wants to renew their coverage.
ND 2118 requires that all short-term plans sold in the state must be sold by a licensed insurance producer, which is in-line with existing rules in North Dakota. But another provision of the state’s new law goes well beyond most states’ requirements: The initial marketing call that an insurance producer makes to a potential client about a short-term policy must be recorded and maintained on file by the insurance producer or the insurance company, for at least a year after the policy terminates.
Other North Dakota state requirements for short-term plans
North Dakota requires short-term plan applications to ask the consumer whether they have comprehensive major medical coverage in force, whether they understand that the short-term plan is NOT a comprehensive major medical policy, and why they are purchasing the short-term plan.
Short-term health insurance in North Dakota is also required to have a medical loss ratio (claim amounts divided by premium amounts) of at least 55 percent.
The North Dakota Insurance Department clarified that insurers offering short-term plans must refile updated plans with the department in order to continue marketing short-term products under the new rules.
The North Dakota Insurance Department published a document in 2017 to warn consumers about the drawbacks of short-term coverage, limited benefit plans, and discount medical plans. In terms of when a consumer should purchase short-term coverage, the North Dakota Insurance Department said “almost never.”
Short-term plan duration in North Dakota
State regulations limit short-term health insurance in North Dakota to durations of no more than 185 days. Although the Trump administration changed the rules as of late 2018 to allow increased short-term plan duration, state regulations still apply if they’re stricter than the federal rules.
Only one renewal is allowed, for a total plan duration of up to 12 months
The North Dakota Insurance Department published a bulletin in September 2018, clarifying the state’s position in terms of the new federal rules for short-term plan duration. In addition to longer initial terms, the new federal rules allow for renewals and much longer total plan durations, including renewals. But North Dakota clarified that only one renewal is permitted, so the total duration of a plan, including renewal, cannot exceed 12 months (the renewal process cannot include medical underwriting).
Which insurers offer short-term plans in North Dakota?
As of October 2018, there were several insurance carriers offering short-term plans in North Dakota. But plan availability had dwindled considerably by 2019. According to this brochure, which was revised in 2020, only National General provides short-term health insurance in North Dakota.
Who can get short-term health insurance in North Dakota?
Short-term health insurance in North Dakota is available to an individual (and their families) who can pass the underwriting guidelines of insurers. In general, this means being under 65 years old (some insurers put the age limit at 64 years) and in fairly good health.
Short-term health plans typically include blanket exclusions for pre-existing conditions, so short-term plans are not adequate for someone who needs medical care for ongoing or pre-existing conditions. You will likely be better served by a policy that provides comprehensive benefits.
If you’re in need of health insurance coverage in North Dakota, your first step should be to see whether you’re eligible for a special enrollment period that would allow you to enroll in an ACA-compliant (Obamacare) 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 North Dakota. These plans 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 before another policy takes effect (with a premium subsidy if you meet eligibility criteria).
When should I consider short-term health insurance in North Dakota?
Excluding coverage for pre-existing conditions can make short-term policies appear more affordable than ACA-compliant policies. However, that upfront affordability can quickly be wiped out by out-of-pocket expenses (like monthly premiums and deductibles) or any costs for a healthcare service for an uncovered condition. That said, there may be situations in which it makes sense to use a short-term plan, 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.
- If you are newly employed and have a waiting period until you can be covered by your new employer’s health insurance plan; short-term insurance may provide a much more affordable (but less comprehensive) stopgap than COBRA or an ACA-compliant plan.
- If you will soon be eligible for Medicare.
- If you’re not eligible for Medicaid or a premium subsidy in the exchange, an ACA-compliant plan might be unaffordable. Some examples of who are ineligible for premium subsidies:
- Folks who earn 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 slightly above the subsidy-eligible threshold, there are steps you can take to reduce 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.