Short-term health plans in New York
New York’s short-term health insurance regulations
All individual and group health insurance plans in New York must be guaranteed renewable (with limited exceptions, such as nonpayment of premiums, fraud, or an insurer’s discontinuation of all policies in a given market). As such, plans with limited terms are not permitted.
In addition, New York requires that “every accident and health insurance policy or contract that provides hospital, surgical or medical expense coverage must be comprehensive and, with respect to individual and small group coverage, must provide coverage for essential health benefits.” Short-term healthcare plans in most states typically don’t provide coverage for some of the essential health benefits (maternity, mental health/substance abuse, and prescription drug coverage are often not included), and such plans could not be sold in New York.
As a result of those two regulations, short-term health insurance plans in New York can not be sold. The Trump Administration’s rules for short-term plans, which took effect in 2018, are clear in noting that states may continue to impose tighter regulations than the new federal rules, and New York clarified that they will continue to prohibit the sale of short-term health insurance in New York .
Who can get short-term health insurance in New York, and when should I consider it?
Under long-standing rules, New York does not allow the sale of short-term health insurance plans, so no one is able to purchase a short-term healthcare plan anywhere in New York state.
Still need health insurance and not eligible to enroll in an employer’s plan? We advise you to check to see if you can enroll in an ACA-compliant major medical plan (Obamacare), either through the New York health insurance exchange/marketplace or directly through a health insurance company. Open enrollment for these plans lasts longer in New York than in most states, as New York has consistently opted to extend open enrollment through the end of January (but this is a year-by-year decision and not guaranteed for future years).
If you’re trying to enroll outside of the open enrollment period, you’ll need a qualifying life event in order to trigger a special enrollment period. A wide range of events will grant you a special enrollment period, including pregnancy (this is a New York rule; pregnancy is not a qualifying event in most states).
ACA-compliant major medical policies 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. So for example, if you’ll soon be covered by an employer’s plan or Medicare, you can still sign up for an ACA-compliant plan during open enrollment or a special enrollment period, and then cancel it when your Medicare or employer-sponsored policy starts to provide coverage.
Depending on your income, you may qualify for a premium subsidy if you enroll in a plan through New York’s marketplace. And New York also has The Essential Plan, which offers low-cost health coverage to people with income up to 200 percent of the poverty level.
Based on your income you may also qualify for health insurance in New York under expanded Medicaid coverage. When the Affordable Care Act was enacted in 2010, Medicaid expansion was a cornerstone of lawmakers’ efforts to expand realistic access to healthcare to as many people as possible. If you have a household income up to 133 percent of poverty (138 percent with the 5 percent income disregard), you would be able to enroll in Medicaid.
In New York, CHIP eligibility for kids extends up to households earning 400 percent of the poverty level (by far the highest in the United States), which is currently $104,800 for a family of four. So most families with modest and middle-class incomes are eligible for CHIP coverage for their children in New York, with low out-of-pocket costs.
Consumers who are not eligible for Medicaid, The Essential Plan, CHIP, or a premium subsidy, may find that the full-cost monthly premiums for an ACA-compliant plan are unaffordable, especially if their income is just a little above the threshold for subsidy eligibility (400 percent of the poverty level for adults). It’s important to understand that contributions to pre-tax retirement accounts and health savings accounts will lower the modified adjusted gross income number that the IRS uses to determine subsidy eligibility, so some consumers can gain eligibility for subsidies simply by saving some additional money in a tax-advantaged account — a win-win, since that money will still be available for them to use later on, either in retirement or when healthcare needs arise.
If that still doesn’t work, there may be other non-ACA-compliant options available, including health care sharing ministry plans and direct primary care plans (DPC plans don’t have the same flexibility in New York that they have in many other states, but are still available). But the extensive limitations of these types of coverage make them inadequate as a long-term healthcare coverage solution, and they should only be relied upon as a last resort when the only other viable alternative is going without healthcare coverage altogether. Their relative affordability in terms of monthly fees can quickly be offset by uncovered medical bills in the event of a serious illness or injury.
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.