Everybody knows a person who is uninsured because health insurance costs are too
expensive. With the recent law changes made by the Trump administration, short-term
plans may be a better fit for many people. With short-term plans being a better fit for
many, it will allow brokers to place more of those policies with less administrative work,
while having greater confidence it is the quality coverage for the individuals and families
Previously, short-term medical plans could only last 90 days before the individual would
need to re-apply in another plan. This made it more difficult for brokers to keep their
clients from having a gap in coverage. This meant more administrative work for the
consumer and that agent. In addition, when those plans restarted so did the deductibles
and max out of pockets. Thus creating a burden on the individual who may have hit their
deductible in one of the 90 day windows, and now has to reapply.
In August 2018, the Trump administration had overruled the 90 day limit on short-term plans, putting them back in the market as one of the biggest players. Now, individuals can enroll in short-term plans for up to 364 days. These 12 month long plans
now allow the individual to work up to the same deductible and max out of pocket for
Having 12 month long plans, with the ability to re-apply afterwards, is a great option for
consumers and agents alike. Now, the broker does not have to contact the individual
every 3 months to reevaluate their health plan options and costs. Instead, it has the
opportunity to be a yearly discussion like most insurance plans.
On top of the short-term plan change, another change that is in effect as of 2019 is the
removal of the tax penalty. Previously, if a plan did not meet the standards of minimum
essential coverage, then an individual would be taxed 2.5% (or $695, whichever is
greater) for how many months they did not have minimum essential coverage. Since
short-term medical plans did not meet the requirement, individuals who had taken those
plans were subject to the tax penalty. The Trump administration has removed the tax
penalty for 2019. Now, individuals will not be taxed for having no insurance, or
insurance that does not meet the minimum essential coverage specifications.
Short-term plans are not for everyone, but the Congressional Budget Office estimates
an additional 2 million individuals will enroll in short-term medical plans with the new short-term medical rulings. This will increase the number of Americans insured as well
as create more opportunities for brokers that hold Life and Health insurance.
Being prepared to take serve one's clients is important. Luckily, Agents for Hope has a
team dedicated to helping brokers by providing them with resources to help them serve
their customers well. Also, joining Agents for Hope allows brokers to earn an average
of 30% more. To find out more, go to www.AgentsforHope.com.