By Pension and Benefits Editorial Staff
The Colorado Division of Insurance (DOI) has amended the regulation governing short-term, limited duration insurance (STLDI) plans, requiring these plans to provide many of the same protections afforded by the Patient Protection and Affordable Care Act (ACA) to qualified plans. The new regulation will become effective on April 1, 2019.
Background. On August 3, 2018, the Departments of Labor, Treasury, and Health and Human Services issued a final rule amending the definition of STLDI in order to exclude it from the definition of individual health insurance coverage. The move lengthened the maximum duration of STLDI from three months to less than one year (364 days) and allows these plans to be renewed for up to 36 months, which, according to the Departments, provides more affordable consumer choices for health coverage. However, critics of the law call them “junk” plans that will jeopardize Americans’ ability to get quality, affordable health care.”
Colorado regulation. Due to the state law already in place, the looser restrictions on STLDI plans did not take effect in Colorado. However, the new regulation offers key changes for STLDI plans:
- STLDI plans must cover essential health benefits as mandated by Colorado law;
- Premiums for such plans can only vary due to the same factors as ACA-qualified plans;
- Health status or claims history cannot be used to calculate or vary premiums; and
- Policies are guaranteed issue, meaning anyone who applies must be accepted. However, such plans do not have to cover preexisting conditions and may exclude such conditions from coverage.
“With this regulation, we offer stronger consumer protection for Coloradans,” said Colorado Insurance Commissioner Michael Conway. “While short-term plans may not offer the most comprehensive health coverage, people who truly need short-term health insurance won’t have to worry about their health conditions raising their premiums. And under this updated regulation, those who enroll in these plans will see more health care services covered.”
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