Buying a short-term health plan in North Dakota
- North Dakota limits short-term 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 plans.
- At least two insurers offer short-term plans in North Dakota.
ND short-term plans limited to 185 days
Long-standing North Dakota regulations limit short-term health insurance plans to durations of no more than 185 days. Although the Trump Administration is allowing short-term plans to last longer, state regulations still apply if they’re stricter than the federal rules.
Only one renewal 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 plans. 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).
New legislation requires insurers to offer a renewal, but still caps total plan duration at 12 months
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 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 plans in the state are also required to have a 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 (although it’s no longer available on the NDID website) to warn consumers about the drawbacks of short-term plans, limited benefit plans, and discount medical plans. In terms of when a consumer should purchase short-term coverage, the ND Insurance Department said “almost never.”
Which insurers offer short-term plans in North Dakota?
- National General (according to this product availability chart, which was revised in March 2019, National General does sell short-term plans in North Dakota. But National General products did not appear on any of the major quote engines that I checked)
- Standard Life
As of October 2018, there were several other insurers offering short-term plans in North Dakota. But plan availability had dwindled considerably by April 2019.
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.