Illinois state legislators passed a law last month which makes several changes to short-term medical (STM) plans. The most significant change limits the maximum duration of coverage to periods that are less than 181 days (i.e. 180 days). This change applies as of November 27, 2018, which is the date the law was enacted. The immediate effective date did not provide a window of time for insurance carriers to adjust their STM plans to the shorter durations of coverage. As a result, insurance carriers who offer STM plans have continued to sell plans with longer durations after this date.

It appears the Illinois Department of Insurance (IDOI) is aware of this information, and they working to ensure this new change is implemented by insurance carriers as soon as possible. It’s unclear what additional guidance may be provided or when it will be provided in response to these circumstances. However, it does appear that carriers are starting to adjust to the new rules, but the exact date that these changes are being implemented varies by carrier.  

Additionally, there are other rules that will now apply STM plans sold in Illinois. As it relates to renewals, a new STM plan cannot be purchased from the same carrier within 60 days after the expiration of a previously purchased STM plan. It does appear that a new STM plan could be purchased from a different insurance carrier, however, medical questions may be asked to determine eligibility and there generally won’t be any coverage for pre-existing conditions. Policyholders must also be given the option to terminate their STM plan after any 30-day interval of coverage. 

A new disclaimer with specific information must also be communicated prior to purchase. For insurance producers who sell STM plans face-to-face or over the phone, the disclaimer must be read out loud. For plans that are sold online, the disclaimer must be provided on the webpage where a person would purchase coverage. The disclaimer language is as follows:

NOTICE: The short-term limited duration insurance benefits under this coverage do not meet all federal requirements to qualify as “Minimum Essential Coverage” for health insurance under the Affordable Care Act. This plan of coverage does not include all essential health benefits as required by the Affordable Care Act. Pre-existing conditions are not covered under this plan of coverage. Be sure to check your policy carefully to make sure you understand what the policy does and does not cover. If this coverage expires or you lose eligibility for this coverage, you might have to wait until the next open enrollment period to get other health insurance coverage. You may be able to get longer term insurance that qualifies as “Minimum Essential Coverage” for health insurance under the Affordable Care Act now and help to pay for it at www.healthcare.gov.

A copy of the new law can be found by clicking here. 

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