Short-term health insurance in Washington State

New rules result in the state’s lone short-term insurer indefinitely suspending sales for 2021

As of 2020, LifeMap was the only insurer offering short-term health insurance plans in Washington. But the state implemented various new regulations related to covered benefits, nondiscrimination, etc. in late 2020, and LifeMap announced soon thereafter that they would need to indefinitely suspend sales until if and when they could bring their products into compliance with the new rules. So for the time being, LifeMap is not selling short-term plans in Washington with 2021 effective dates.

As noted below, LifeMap has had to suspend sales in the past in order to bring products into compliance with new Washington rules, and has successfully returned to the market after doing so.

Washington State’s short-term health insurance regulations

The federal regulations implemented by the Trump administration in 2018 are clear in noting that states may impose tighter regulations. And Washington’s insurance commissioner, Mike Kriedler, who has called short-term plans “a poor solution for consumers,” announced in March 2018 that his office would begin the process of rule-making to define short-term plans at the state level.

An outline of the proposed regulations was published in June 2018. The official draft regulation notice was published on August 21, 2018, and public comments were accepted until September 24, 2018.

The rule was officially adopted in October 2018. It was adopted as proposed, except the rule requiring 20 days’ notice before a rescission or cancellation was adjusted for circumstances in which there are fewer than 20 days remaining in the plan’s duration.

The new regulations, which took effect in January 2019, include the following provisions:

• Short-term plans are limited to three months in duration with no renewals allowed.
• Insurers are prevented from selling short-term plans to an applicant who had already had three months of short-term coverage in the prior 12 months.
• Short-term plans are required to cover a list of basic inpatient, outpatient, and surgical services.
• Short-term plans must continue coverage (with no additional premiums) if the insured is hospitalized on the date that the short-term plan would otherwise have ended. The extension of coverage would last until the patient is discharged from the hospital.
• The lookback period for pre-existing conditions is limited to no more than 24 months (i.e., a pre-existing condition that hadn’t had symptoms or treatment for more than 24 months cannot be excluded).
• A short-term insurer must offer at least one plan with a per-person deductible of $2,000 or lower.
• The sale of short-term plans is banned during the open enrollment window that applies to ACA-compliant plans, if the short-term coverage is to take effect in January. So short-term plans can’t be sold in direct competition with ACA-compliant plans during open enrollment. State regulators noted that this is to help avoid confusion for consumers, since short-term plans purchased during open enrollment would take effect before the start of the new year, whereas ACA-compliant plans sold during open enrollment would take effect January 1 of the coming year (open enrollment for ACA-compliant plans in the individual market runs from November 1 to December 15).

Short-term plan duration in Washington State

The new rules for short-term health insurance in Washington State, effective January 2019, limit the short-term plan duration to no more than three months in length and prohibit renewals. Previously, the duration of short-term coverage in Washington State was not restricted beyond federal regulations, although such plans had to officially be determined to be short-term limited-duration plans by the Insurance Commissioner and approved prior to being offered for sale. [See RCW 48.43.005 (26)(l).]

Until October 2, 2018, federal regulations limited short-term health plans to no more than three months, and renewals were prohibited. But the Trump administration’s rules for short-term plans (effective October 2, 2018) allow them to have initial terms of up to 364 days, and a total duration (including renewals) of up to 36 months.

Although the federal rules changed on October 2, 2018, and Washington’s new rules didn’t take effect until January 2019, the Office of the Insurance Commissioner confirmed that LifeMap, the only insurer selling short-term plans in Washington in 2018, did not submit filings for any longer-term short-term plans to be sold in the final quarter of 2018. So although longer short-term plans were allowed under federal rules in late 2018 and were not banned under state rules until 2019, the only plans available in Washington in 2018 were limited to three months in duration, and that has continued to be the case ever since.

LifeMap resumed sales of short-term plans in 2019, but sales were restricted during the open enrollment period for ACA-compliant plans

LifeMap was the only insurer selling short-term plans in Washington in 2018, and they suspended sales as of mid-November 2018, with the suspension scheduled to last “until [they] can bring the product into compliance with the updated regulations.”

The Washington Office of the Insurance Commissioner confirmed that as of early 2019, there were no short-term health insurance plans for sale in Washington state.

But LifeMap’s sales resumed in mid-April 2019, with the changes necessary to comply with the state’s new rules.

Which insurers offer short-term plans in Washington State?

We are not currently aware of any insurers offering short-term health insurance in Washington state, after LifeMap announced in late 2020 that they would be indefinitely suspending sales until they could bring their products into compliance with the state’s new rules for short-term plans.

After suspending enrollments for several months, LifeMap began offering coverage again in Washington in April 2019. But under the terms of the state’s new rules, short-term plans with January effective dates cannot be sold between November 1 and December 15 (the open enrollment period for ACA-compliant plans). So LifeMap did not accept applications for January 2020 effective dates that were submitted between November 1 and December 15 2019. And sales of plans with 2021 effective dates have been suspended indefinitely.

Assuming sales resume at some point (by LifeMap or another insurer), applications for short-term coverage will be accepted prior to November 1. And starting on December 16, applicants would then be able to submit applications for short-term plans with effective dates in the coming year. (Note that Washington state typically extends the annual open enrollment period beyond December 15, which would presumably extend the window during which short-term plans cannot be sold. But this decision is made on a year-to-year basis).

How can I get health coverage in Washington state?

Since short-term health insurance plans are not currently available in Washington state, we recommend that you check to see if you’re eligible to enroll in an ACA-compliant major medical plan. These plans are available during open enrollment in the fall, and for 2021 coverage, Washington’s exchange is offering a one-time COVID-related enrollment period from February 15 to May 15, 2021, for anyone who wants to enroll in coverage.

A qualifying life event is not necessary in order to use this COVID-related enrollment period, although qualifying events are normally necessary in order to enroll in an ACA-compliant plan (through the exchange or directly from an insurer) outside of the fall open enrollment period.

These plans are purchased on a monthly basis, so you can enroll in coverage even for only a few months until another policy takes effect — and if you’re eligible, you may qualify for financial assistance in the form of a premium subsidy.

Should I consider short-term health insurance in Washington State?

If and when short-term plan sales resume in Washington, you’ll want to make sure you understand the specific healthcare benefits the plan will provide. Washington’s rules for short-term plans are more strict than most states (which is why there are currently no plans for sale in the state), but short-term plans are still not as robust as ACA-compliant coverage, and cannot be used for more than three months in Washington.

But there may be situations where 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.

Regardless of the circumstances, you’ll only be able to be enrolled in a short-term plan for a maximum of three months within any given 12-month period (assuming sales resume in Washington), so short-term plans do not provide an affordable or long-lasting substitute for regular healthcare insurance.

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.