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QUESTION: Hello Mr.Higgins

I am currently covered by a short-term health insurance plan until 07/31/14. Then starting on 08/01/14 I will be covered by The University of North Carolina Greensboro's student health insurance plan. After doing some research I have learned that short term health insurance does not meet the minimum requirements set out by the affordable healthcare act. My question is will I be hit with the no insurance penalty come the end of March?

ANSWER: Sean:

The short answer is...I'm not sure, but I will find out today and let you know.

The president extended the deadline for purchasing ACA compliant policies for those currently insured with individual plans until 2016. Whether short-term plans qualify under this extension I'm not sure. When did the short-term plan go into effect, and what type of coverage did you have before the short-term plan, if any?

My educated guess is that you are fine, and you will not be taxed/fined, but I'll let you know for sure once I receive your response to my questions above. Very good question by the way.

Mike

---------- FOLLOW-UP ----------

QUESTION: Thank you for your quick response Mr.Higgins

My current plan went into effect on 01/08/14. The coverage I had before was also a university student health plan that expired on 12/31/13, because I graduated in the fall. The reason I bought this short-term plan was to tie me over until I started graduate school.

ANSWER: Sean:

My educated guess was wrong I have been told, short-term plans will not qualify for the deadline extension. Only those with individual/family plans in force will be able to keep their existing plan until 2016, thereby avoiding the tax penalty for non-complaint ACA policyholder's and the uninsured.

In your case this means that you will be non-compliant for eight months, and the IRS will assess a fine equal to 1% of your income, minus the filing threshold for singles, around $10K. As an example, say you make $30K this year. Subtract the filing threshold for singles of $10K, and multiply by 1%, or $200. Your fine would be $200 in this income example.

You can be non-compliant for up to three months and still avoid the penalty. March 31st is the deadline for open enrollment, with coverage beginning May 1st if you enroll before the end of the month. This would mean you were non-complaint for one month, hence avoiding the penalty. Of course, you will need to see if the short-term carrier will refund any of your premium. You will also have to see how much an individual plan will cost you, and if you qualify for premium assistance or Medicaid. If you end up buying an individual plan this month, or enrolling in Medicaid, you can drop this coverage in August, assuming the student plan is ACA compliant.

Have you looked into an ACA plan, whether you qualify for premium assistance, or Medicaid?

If you would prefer to discuss over the phone, feel free to call me, 602.405.8769. I only sell insurance in AZ and RI, but should be able to answer any questions you may have. Of course, using the Allexperts portal is fine as well, or email, info@higginscompanies.com.

Thank you.



---------- FOLLOW-UP ----------

QUESTION: Hello Mr.Higgins

I think I'm going to go ahead and pay the penalty for this year and get a plan for 2015. My income for 2013 was $26,962 working for DECA a government agency. So going by your calculation my penalty fee would be $169.62. After looking at the available plans on the marketplace they are to expensive with the lowest being $135 per month. Also apparently I don't qualify for medicaid because my current job offers health insurance, which is also to expensive. Do you know of any other type of assistance I could possibly get?

Answer
Sean:

I do not know of any other assistance that would be available to you.
Without knowing anything about your employer group health plan, my educated guess though is that if offers a lower deductible, and possibly better coverage, than the $135 ACA plan you have mentioned. This likely being the case, I would enroll in the employer plan if at all financially possible. I do understand though that roughly $2000 a year is a lot of money to spend on something you likely never use.

From what I've read, prices may be going up again next year, in some areas doubling or tripling. The main reason for this, I've read, is that the young and healthy are not buying health insurance in sufficient numbers to help pay for those that are older. This of course will cause more young people such as yourself not to buy health insurance. Un-affordable is un-affordable, one does need to eat.

As for the tax penalty for not being insured, there are many exemptions. Here's an article pointing out a few of them, http://www.kansas.com/2014/03/25/3367200/aca-insurance-mandate-comes-with.html.

Thank you.

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Michael Higgins

Expertise

All questions pertaining to health insurance, whether group, individual/family, student, child-only, COBRA, HIPAA, Portability, dental. No expert knowledge in areas such as life insurance, disability, workman's compensation, auto, etc.

Experience

34 years as owner of health insurance agency, primarily dealing with Blue Cross Blue Shield of Arizona.

Education/Credentials
College, Business Administration.

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