Short-term health plans in Utah
- State insurance code has been adjusted in Utah to allow short-term plans to follow federal duration limits.
- Short-term plan duration in Utah can be up to 36 months if the policy is renewable (the initial term is limited to less than 12 months).
- The Utah Insurance Department has proposed new minimum standards for short-term health plans.
- At least six insurers offer short-term plans in Utah, but one has suspended sales as of April 2021 due to new proposed rules.
- The Utah Insurance Department has published each insurer’s COVID coverage details.
Utah’s short-term health insurance regulations
Utah Insurance Code 31A-1-301(172) defines a short-term health insurance plan as having an initial term of less than 12 months, and a total duration of no more than 36 months, including renewals or extensions. This lines up with the federal limits that apply to short-term health plans, under a rule change that was made by the Trump administration in late 2018.
It’s noteworthy, however, that Utah’s code has changed on this matter. As of late 2018, when the new federal rules were taking effect, Utah insurance code 31A-30-103(19) — which now refers to small employer carriers and no longer defines short-term health insurance — stated that a short-term plan was a nonrenewable policy with a duration of “less than 364 days.” As long as a plan met those standards, it was not subject to the “health benefit plan” rules in Utah.
The current statute also confirms that short-term plans are not considered health benefit plans (and are thus not subject to the rules that apply to such plans), but the definition has been expanded to allow Utah’s short-term health plans to be renewable and last up to three years if the insurer chooses to offer renewability.
There are state-based filing requirements for short-term health insurance in Utah, which are outlined here.
Short-term plans duration in Utah
The maximum initial term limit for short-term health insurance in Utah is under 12 months. If the policy is renewable, total duration can be up to 36 months. This aligns the state’s rules with the Trump Administration’s rules for short-term plans, which took effect in late 2018.
Proposed minimum standards for short-term health plans
In January 2021, the Utah Insurance Department proposed new minimum standards for short-term health insurance plans. The Department is accepting public comments until March 3, 2021, and the earliest possible effective date for the proposed changes is March 10, 2021.
The proposed rule change calls for several minimum coverage requirements on short-term plans, including a benefit cap of at least $1,000,000, and coinsurance/copayments that cannot exceed 50 percent of the covered charges. Most of the currently available short-term health plans in Utah already have benefit caps of at least $1 million, but there are some plans with benefit caps of $500,000.
Various inpatient services would have to be covered under the proposed minimum standards, including anesthesia, prescription drugs, imaging and lab services, etc. And various outpatient services would also have to be covered, including dialysis, office visits, physical/speech/occupational therapy, and diagnostic and lab services—but notably, not prescription drugs, unless it’s related to a surgical procedure.
And mental/behavioral health services would not have to be covered, nor would maternity care. These three benefit categories (outpatient prescriptions, mental health care, and maternity care) are often excluded on short-term health plans, and Utah’s proposed minimum standards would allow them to continue to be excluded.
As a result of Utah’s proposed rules, at least one insurer — LifeMap — has suspended sales of short-term plans with effective dates of April 2021 or later. LifeMap will resume sales if and when they are able to bring their products into compliance with the state’s proposed rules.
Which companies offer short-term health insurance plans in Utah?
Several health insurance companies offer short-term medical insurance in Utah. Early in the COVID pandemic, the Utah Insurance Department asked all healthcare insurers in the state, including those offering short-term health plans, to complete a survey indicating how their plans would cover various scenarios related to COVID-19 costs. The survey responses are linked for each of the state’s short-term insurance companies:
- Independence American Insurance Company
- Life Map (COVID coverage survey response); LifeMap has suspended sales of new plans with effective dates of April 2021 or later.
- National Foundation Life (COVID coverage survey response)
- National Health Insurance Company/National General (COVID coverage survey response)
- UnitedHealthcare/Golden Rule (COVID coverage survey response)
- Select Health (COVID coverage survey response)
SelectHealth also offers ACA-compliant major medical plans in Utah. In some states, there is no overlap between the insurance companies that offer short-term policies and those that offer ACA-compliant policies.
Who can get short-term health insurance in Utah?
Short-term health insurance in Utah can be purchased by residents who qualify under the underwriting guidelines of insurers. In general, this means being under 65 years old and in fairly good health.
Folks in Utah should consider that short-term health medical insurance plans typically include exclusions for all pre-existing conditions (typically a blanket exclusion for any pre-existing condition, rather than specific exclusion riders for each condition) so these types of plans are not adequate for someone who needs medical care for ongoing or pre-existing conditions.
It’s also important to understand that although short-term plans are often more affordable than regular major medical coverage (unless the person is eligible for a premium subsidy, in which case the major medical coverage might be less expensive), they have shortcomings that can result in much higher out-of-pocket medical costs if a serious health condition arises, even if it’s not related to a pre-existing condition.
Short-term healthcare plans do not have to cover the essential health benefits, and often exclude coverage for at least some of them (maternity care, prescription drugs, and mental health care are the most commonly excluded). In addition, short-term plans generally impose benefit caps on the total amount they’ll pay for your care.
If you’re in Utah and need health insurance, check to see if you’re eligible for a special enrollment period that would allow you to enroll in an ACA-compliant major medical plan (ie, an Obamacare plan). There are several qualifying life events that will trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Utah, and these plans will offer better coverage than a short-term health insurance policy.
ACA-compliant individual major medical plans (obtained through the exchange or directly from an insurance company) 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. And if your annual household income makes you eligible for a premium subsidy, you can receive the subsidy for the months you have coverage, even if it’s only a few months.
Should I consider short-term health insurance in Utah?
Although short-term health plans do not provide the level of protection that an ACA-compliant plan will provide, they’re better than having no coverage at all. And there are some scenarios in which they might be your only option or your only realistic option:
- If you missed open enrollment for ACA-compliant coverage and do not have a qualifying event to trigger a special enrollment period.
- If you’re newly employed and you’ve got a waiting period before your employer’s health plan takes effect (if you also have a qualifying event, you may be able to enroll in an ACA-compliant plan to cover you until your employer’s plan starts).
- If you’re losing coverage under another plan mid-month and enrolling in a new ACA-compliant plan using a special enrollment period, the new coverage typically cannot start sooner than the first of the following month. So you would have a gap in coverage from the day your plan ends until the start of the next month. A short-term health plan might be the only available option to fill that window, although if COBRA or state continuation coverage is available to you, you could use that option as your fall-back instead.
- If you’ll soon be enrolled in Medicare, but don’t have another coverage option before that point. Note that although Medicare covers pre-existing conditions, optional Medigap plans can require enrollees to wait up to six months for pre-existing condition coverage, if they didn’t have coverage for their pre-existing conditions prior to enrolling in Medicare.
- If you’re not eligible for Medicaid or a premium subsidy in the exchange, the monthly premium costs for an ACA-compliant plan might be unaffordable. People ineligible for premium subsidies include:
- Anyone earning over 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 just a little above the subsidy-eligible threshold, there are steps you can take to reduce it).
- People in the ACA’s family glitch. This happens when people are employed by businesses that provide affordable health coverage to employees, but require the cost of health benefits for family members to be fully or mostly payroll deducted, resulting in unaffordable total family premiums — and yet, the family members are also not eligible for premium subsidies to offset the cost of coverage purchased in the exchange.
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.