How STM Can Benefit Consumers During ACA Enrollment Gaps

Kelli Vorndran
How STM Can Benefit Consumers During ACA Enrollment Gaps

Open Enrollment in 2014 for a Marketplace health plan under the Affordable Care Act (ACA) came to a close on March 31.

A plan purchased between March 16 and March 31 will go into effect on May 1st. After that  unless you have a life event such as losing your job, having a child, or getting divorced — you will have to wait for the next enrollment period, which is set to begin in November.

But even if circumstances prohibit you from enrolling in an ACA policy before the March 31 deadline, you still have options to ensure you have healthcare coverage.

Maintain Your Current Plan

Many insurance policies are now considered non-compliant because they don't meet the ten essential requirements of ACA marketplace plans. Those policies were set to be cancelled starting in October, but the White House has now extended the deadline requiring consumers to switch to a compliant plan for another two years.

Your current policy may not be as comprehensive as you'd like, but if you're comfortable with the benefits and budget, you can keep it for a while longer.

Buy Short-Term Medical (STM) Insurance

STM policies don't meet the ten essential requirements of ACA marketplace plans; traditionally, consumers purchase STM plans when they're in need of coverage during a gap in employment. But they're also worth considering if:

  • You're a retiree in need of coverage before enrolling in Medicare.
  • You're a student transitioning from a parent's plan.
  • You must wait for new insurance to begin.

For example, suppose you enroll in an ACA plan that doesn't take effect until May 1. That leaves you and your dependents exposed for more than a month. You could purchase an STM policy to ensure you have coverage during that gap.

Short-term medical policies are not long-term solutions; they're intended for those needing coverage for less than a year. And if you choose to enroll in one, you will have to pay a penalty in 2014 — an amount that will increase in subsequent years.

Advantages are that they're usually easy to secure because no underwriting is involved, and you can fill out a short online form and confirm coverage within 24 hours.

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