Friday, June 20, 2014


LifeaHealthPro's Allison Bell has an interesting piece today comparing the average costs of a Short Term Medical plan to a full-blown ObamaTax-compliant model, with an emphasis on how this plays with the younger crowd. She correctly points out that these can be a viable alternative for folks who missed the last Open Enrollment, or even as just a cost-saving measure.

One thing that she didn't touch on - and, in fairness, I haven't seen this dealt with anywhere - is a specific "gotcha" that's lurking for folks who are just looking to bridge the gap between last March and this coming November. To wit:

Recently, I had a call from a gentleman who had lost his group insurance, but had waited more than 60 days to do anything about it. By then, he'd lost his opportunity for a Special Open Enrollment, so we started to write a short term medical plan that would run to the November Open Enrollment, when he could then hop onto a "regular" plan.

So, got the quote, made the appointment, and figured we were all set.

And then the little light-bulb went off:

He could indeed sign up for a new plan in November, but that plan wasn't going to go into effect until next January. We needed two more months of coverage, for a total of eight (May to January). Most STM plans will only allow a maximum of 6 months, and then can be re-written for the other 2. But if you've had any claims during that initial 6 months, these then become pre-existing conditions on the new 2-month plan and won't be covered.

Fortunately, one of my carriers has a plan that can be written for up to 11 months, so we dodged that bullet.

But I wonder how many folks in this situation (and the agents servicing them) are aware of this little issue. At this point, it's probably moot for this year: plans written with July effective dates will be fine at six months. But remember: there's always next year....
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