Short-Term Health Insurance Now an Affordable Option for Young Adults With the ACA Penalty No Longer in Place

With the ACA tax penalty out the window, many more options have been opened up to the masses.

After plenty of discrepancies about the ACA Penalty and its ending, this following 2019 tax season could be its last note. People that jumped the gun and missed out on qualified health insurance throughout 2018 may be paying the penalty come 2019's tax season for their 2018 income. 

With open enrollment for 2019 health coverage being available currently, consumers (variable by state) may have more expansive options this year with the ending of the Obamacare Tax Penalty. Other coverage options that didn't meet the Affordable Care Act's "Minimum Essential Coverage" rule (to avoid the penalty) come into play more now when a consumer would like to weigh out the options.

Short-term health insurance plans having its returned 364-day limit alongside being up to 70% cheaper than qualified Obamacare ACA Marketplace Plans for some, it seems to be a more viable option for young adults that are healthy and for people with medium to high income that are healthy. Unlike plans on the marketplace, short-term plans don't look at income as a factor for premium costs.

With some short-term plans adding the renewable option, its a more attracting offer for most people, being that they can renew their coverage for up to 36 months without additional medical underwriting. Although the initial short-term plan can only last less than 12 months, this renewable option attached to certain plans can cause for them to be more pricey.

The final rule for the changes done to short-term plans states that short-term plans can be sold with initial terms of up to 364 days. They can also be renewed with "limited duration" as long as the total plan length doesn’t exceed 36 months. The final rule also states that short-term plans require a disclosure to help people understand that short-term plans differ from individual health insurance plans sold on the Marketplace.

Though these initial rules are stated, HHS made it clear that each individual state can alter the set of rules; it’s up to each state to set rules applicable to short-term plans sold within the state. With that, many states are taking deviated approaches on short-term plans that either clearly expands the access of short-term plans and making them profitable for the state, or the contrary, stripping the access of short-term plans completely for health insurance consumers.

The following is a comparison example of Obamacare Health Plans vs Short-term Health Plans:

  • A healthy 30-year-old male making $30,000 in Fort Lauderdale, FL can get a $103/month bronze plan with a Max Out-of-Pocket of $7,900 as their most affordable option with Obamacare.
  • A healthy 30-year-old male making any amount of money in Fort Lauderdale, FL can get a 360 day short-term plan for $76/month with up to $250,000 in coverage as their most affordable option with Short-term Health Insurance.
  • Consumers should also take into account that ACA / Obamacare Plans are qualified major medical plans that DO NOT have a limit on catastrophic coverage in most cases while Short Term Medical Plans DO.

Without the Obamacare Tax Penalty for 2019 coverage, consumers can shop for Health insurance alternatives like short-term health insurance without the fear of a minimum $695 tax penalty per year.

For more information on temporary health insurance, visit

Source: BenaVest | Health, Life & Retirement