Short term insurance is designed as an affordable safety net for those who are transitioning from one life event to another without a basic health plan. Depending on the short-term plan, benefits can be wide-ranging, with some policies providing up to $5 million in individual coverage.
Just as the name implies, these health insurance policies are a temporary solution to a short-term insurance gap. Most plans last one to six months and can be renewed for a total of 12 months. The application process is simple and policies can be issued the next day.
The most important thing to remember is that a short-term plan is not designed to cover pre-existing conditions. These are typically defined as any condition you had during the 36-month period prior to the start of coverage. It’s important to answer the health questions on the application honestly. Otherwise, you could wind up with a denial of any treatment related to your pre-existing condition.
All short-term policies have very specific limitations and exclusions, so read the policy carefully before you buy.
Who needs short-term health insurance?
Individuals who are temporarily out of work:
Individuals that are between jobs.
Employees who are newly hired:
If you have just started a new job, you may be waiting to become eligible for your company’s group health plan. This can take one to six months after your start date. In order to avoid a lapse in coverage, short-term health insurance can fill the gap.
Recent college graduates:
Many grads look for jobs offering health insurance benefits, but until they land full-time jobs, short-term insurance can fill the gap.
People waiting to qualify for a standard health insurance policy:
People applying for private-market individual health policies may not want to go without coverage while they wait for their applications to be approved. Having a short-term health insurance plan in place while you wait provides a seamless transition, and if you are denied for your standard policy, you still have basic health coverage through your short-term plan.