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SHORT TERM (STM) COVERAGE
STMs are considered major medical insurance and typically cover 100% of medical costs after a deductible and out of pocket maximum to a lifetime limit of up to $2 million depending upon the plan and carrier.
- Depending on the State, they now can be written for up to one year and can be renewed up to three years
- Note: California and several other States do not allow STM plans
- Short-term medical plans do ask medical questions, so you are not guaranteed to be approved for coverage and they generally do not cover pre-existing medical conditions and prescriptions
Benefits of STM Plans
- Most STM plans have broad network coverage
- Premiums are often low, in the range of half of ACA plans
- Apply all year round, not limited to Open Enrollment periods
Problems with STM Plans
- Pre-existing conditions coverage not available
- Applications may be rejected due to health status
- Poor prescription drug coverage
SPECIFIED BENEFIT LIMITED MEDICAL/INDEMNITY PLANS
These plans pay a specified dollar benefit for medical services such as hospitalization, surgery, and physician office visits.
Benefits of Limited Medical/Indemnity Plans
- Premiums can be very affordable
- Member receives a cash payment upon a qualifying event such as an accident, or specific critical illnesses, or hospital admissions as specified in the plan
- Applications can be made any time of the year, no waiting for Open Enrollment
- Usually are “guaranteed issue” which means there is no medical underwriting, so applications are not rejected due to health status of applicants
- Generally, these plans have pre-negotiated rates with a healthcare provider network
Problems with Limited Medical/Indemnity Plans
- Benefits are tied to specific incidences, such as an accident, critical illness, doctor visits, or hospital admission, depending on the policy
- No benefits for general conditions such as diabetes, arthritis, etc.
- Medical expenses often capped at a rate much lower than major medical plans
- Certain pre-existing conditions may be not covered for up to twelve months
ASSOCIATION SPONSORED HEALTH PLANS
Benefits of Association Health Plans
- Usually utilize a Health & Welfare Benefit Trust structure wrapped under the Association
- Usually contain several plans (Bronze through Gold)
- Utilize nationwide group PPO networks
- The Trust administers the various plans and uses a Third-Party Administrator (TPA) to verify benefits and pay claims on part of the Trust.
- These plans are designed for Self-Employed, Independent Contractors, Sole Proprietors, Managing Members of LLCs, Sub-S Shareholders, other Small Business Owners with fewer than five employees, and W2 employees where the company does not provide group coverage
- May enroll at any time during the year
Problems with Association Health Plans
- Because the Trust administers the plans they act as the self-insured entity paying the actual claims
- Trustee may ask health and pre-existing condition related questions (underwriting)
- Trustee may exclude joining the Trust due to a negative health history or pre-existing conditions
HEALTH CARE SHARING MINISTRY PLANS
Benefits of Member Health Share Ministry Plans
- Plans tend to mimic ACA mandates
- Monthly rates may be 40% to 60% less than the cost of ACA (Obamacare) plans
- Usually utilize a nationwide PPO network
- Enroll year round, no qualifying event needed
Problems with Member Health Share Ministry Plans
- Depending on Plan, maximum lifetime benefits may be limited to $1,000,000
- Limited drug coverage
- Any pre-existing conditions at time of enrollment will be excluded for up to 24 months
- Pregnancy benefits will be excluded for the first 10 months after enrollment
