Short-term health insurance can be critical to ensuring you are covered with no gaps throughout the transition periods in your life. Below are examples of five life transitions during which you would need short-term health insurance.
1. You Started a New Job and Are Waiting for Your Employer's Insurance to Start.
A short-term health insurance plan may be a great solution for you if you are moving from one job to another. Your former company's plan will lapse once you leave, and many companies don't provide health insurance on your start date, but rather 60 or 90 days after.
Keep in mind that you will not be eligible for Cobra if you opt for short-term coverage.
2. You Are Between Jobs.
If you are laid off or quit without another job on the horizon, you may find yourself lacking health coverage. If you anticipate being hired within the next 12 months (the longest time a short term plan normally covers you), then a short-term plan could be a great solution.
3. You Have Recently Graduated But Are No Longer on Your Parents' Plan.
First, if you are under 26, you can remain on your parents' health insurance plan, thanks to the enactment of the Affordable Care Act.
If you are aging off of your parents' plan or can no longer remain on their insurance for an alternative reason, short-term health insurance can be a good option for coverage until you enroll in an employer-sponsored plan or select a plan from the Health Insurance Marketplace (again, keep in mind that short-term plans generally last for a maximum of 12 months).
4. You Have Recently Retired and Are Awaiting Medicare.
In 2013, just 28 percent of employers offered health insurance to retired employees, and the trend since 1988 has been a steady decline. Unless your company does offer insurance to retirees, if you retire before you are 65 and qualify for Medicare, you may need to find your own coverage until Medicare begins.
For those under 65, a short-term plan is a great solution to bridge this gap in coverage.
5. You Recently Moved to the United States From Another Country (Citizen or Non-citizen).
If you recently moved to the United States from a foreign country and you are awaiting insurance coverage from your employer or educational institution, or if you have a waiting period before you're able to receive Medicare or other government-sponsored health plans, a short-term plan can make sure you are covered throughout this gap.
If you are searching out coverage on the health exchange, a short-term plan can give you the time you need to choose the plan that is right for you.
Note that short-term plans are not ACA-compliant, so you will owe a fee (to be paid when you file your 2016 federal tax return) for any month you, your spouse, or your tax dependents don't have an ACA-compliant plan. However, you can avoid this fee by claiming a—short gap in coverage—exemption if you have a short-term Medical policy (or go without ACA-compliant coverage) for no more than 2 consecutive months.
