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Alabama Short-Term Health Plans

Residents of the state of Alabama are now eligible to apply for short-term health insurance that defaults to new federal guidelines because Alabama has no state-specific regulations. Rules for Alabama short-term health plans extend initial terms up to 364 days.

The total duration of Alabama temporary plans with renewals may allow consumers to continue coverage up to 36 months. This is a significant improvement over previous limited-term periods.

Prior to October 2, 2018, short-term health plans were restricted to up to 90 days or less than three full months. With the easing of restrictions under the Trump administration, Alabama joins many other states following federal rules.

Additionally, Congress passed the Tax Cut and Jobs Act, which had an important provision for healthcare. The new law repealed the ACA’s “individual mandate,” which required Americans to purchase health insurance, qualify for an exemption, or face a penalty if they weren’t already covered by their employer or a program such as Medicare or Medicaid.

These changes in legislation and rules have given consumers far more options for healthcare, especially for young and healthy consumers. Alabama short-term health plans allow more residents to find affordable coverage outside of the ACA’s marketplace exchange.

Alabama to Follow Federal Rules

The Alabama Department of Insurance confirms that the state will follow new federal rules. Insurers do have the option to offer shorter maximum terms, to prohibit renewal, and to reject applicants with preexisting conditions.

Some Alabama insurers offer plans with terms of up to six months while others provide 364-day policies, just one day shy of a year-long policy. This is a significant change to the Obama-era regulations on what constituted a short-term policy.

Alabama consumers should be aware that these temporary policies don’t meet federal guidelines for inclusion in the Affordable Care Act (ACA), popularly known as Obamacare. Under the ACA, plans must meet strict conditions in order to be considered “minimum essential coverage.”

Alabama short-term health plans don’t provide major medical coverage and are therefore not ACA-compliant. These temporary plans offer less coverage, but come with lower premiums most of the time.

Also, termination of a short-term plan doesn’t meet the standard for a “qualifying life event,” a situation that would allow consumers to seek insurance in marketplace exchanges under the Special Enrollment Period (SEP).

SEP differs from what’s known as the ACA’s “Open Enrollment,” a period of several weeks at the end of the calendar year in which individuals and families can sign up for government-compliant insurance. A SEP is triggered when situations or events outside of Open Enrollment qualify people to seek coverage.

Losing a Medicare, Medicaid, employer-sponsored plan, or major medical coverage would be considered a qualifying event. However, losing short-term coverage doesn’t.

Alabama Short-term Plans

Insurers licensed to sell Alabama short-term health plans include Companion Life, National General, and UnitedHealthcare, among others.

Companion Life offers a six-month Economy 10000 (indemnity) plan with a $10,000 deductible, 20-percent coinsurance, and $20,000 out-of-pocket limit. This plan pays up to a maximum of $500,000 for the term of the policy. The company’s 6-month Choice 10000 (indemnity) has the same options as above, but with a maximum of $1 million for the term of the policy. The 6-month Economy 5000 (indemnity) carries a $5,000 deductible, 20-percent coinsurance, and $15,000 out-of-pocket limit, with a maximum $500,000 for covered services for the term of the policy.

National General offers a preferred provider organization (PPO) plan of 12 months 5000 80/20, with a $5,000 deductible, 20-percent coinsurance, and a $10,000 out-of-pocket limit. This plan is limited to $1 million for the term of the policy. The PPO 12-month 2500 100/0 plan lasts for 12 months, with a $2,500 deductible, no coinsurance, and a maximum $1 million out-of-pocket limit. The company’s 12-month 5000 100/0 plan is similar to the above, but with a $5,000 deductible. The 12-month 10000 80/20 plan has a $5,000 deductible, 20-percent coinsurance, $15,000 out-of-pocket limit, and a maximum of $1 million.

United Healthcare offers a 6-month Short-term Medical Value Select A with a choice of $10,000 or $12,500 deductible, 30-percent coinsurance, and a $22,500 or $20,000 limit, respectively. The term maximum benefit is $2 million.

Alabama consumers should be aware that these plans don’t meet the ACA’s guidelines for minimum essential coverage (MEC). Be sure to review plan details for exclusions and limitations.

With so many options, Alabama consumers have plenty of choices to get customized healthcare coverage that closely matches their needs.

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