Final Rule Released Defining Short-Term Limited Duration Insurance

Last week, the Departments of Health & Human Services, Labor, and the Treasury released a final rule amending the definition of short-term, limited-duration insurance (STDLI), which is a type of health insurance coverage designed to fill temporary gaps in coverage when an individual is transitioning from one plan or coverage to another.  STLDI is not considered to be individual health coverage under the law, so it does not need to meet the same requirements as Marketplace plans.  Under this rule, the Departments are shortening the limit on the length of the initial contract term from 12 months to no more than three months.  Additionally, the maximum total coverage period is changing from 36 months to four months including renewals and extensions.  This rule also revises the federal standard for notices that insurers must use to help consumers better distinguish between comprehensive coverage and STLDI and get information on their health coverage options. This document also sets forth final rules that amend the regulations regarding the requirements for hospital indemnity or other fixed indemnity insurance to be considered an excepted benefit in the group and individual health insurance markets.

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