Short-term health insurance in Illinois

Short-term health plans in Illinois

State law limits short-term health insurance in Illinois to six months, after lawmakers overrode the governor’s veto.
The state’s insurance department has also warned consumers about marketing tactics in which short-term plans are disguised as ACA-compliant coverage.
At least nine insurers offer short-term health insurance in Illinois.

Short-term plans duration in Illinois

Short-term health insurance in Illinois is limited to six months. HB2624/SB1737, which was approved by lawmakers in 2018 and sent to the governor in late June, implemented state-level guidelines for short-term health plans. The amended version of the legislation limits short-term plan duration to less than 181 days and prohibits renewals.  Additionally, an enrollee cannot purchase a new short-term plan from the same issuer within 60 days of the termination of a previous short-term plan.

The legislation also calls for short-term health insurance in Illinois to be sold with prominent warning labels, disclosing the fact that they are not minimum essential coverage, do not cover pre-existing conditions, and do not include coverage for all of the ACA’s essential health benefits.

Illinois short-term health insurance regulations

The current rules governing short-term health insurance policies in Illinois center around legislation that was sent to Republican Governor Bruce Rauner on June 29, 2018, and he had 60 days to sign it or veto it. The bill would have automatically become law after 60 days if he had taken no action, but he vetoed it on August 26. In November, however, lawmakers in Illinois overturned Rauner’s veto. The veto override vote in the Senate was unanimous, and there was also very strong support in the House, with an 89-20 vote to overturn the veto.

The legislation is quite extensive and addresses other insurance provisions in Illinois. Most of it, including the provisions relating to short-term health plans, took effect as of when the law was enacted (November 27, 2018), although it took a few weeks for the details to be sorted out and the insurers to stop marking longer short-term plans. By 2019, all of the available short-term plans in Illinois were capped at six months in duration, and were not renewable.

Until October 2, 2018, federal rules limited short-term policies to three months in duration, and renewals were prohibited. But the Trump Administration implemented new rules in 2018, allowing short-term health plans to have initial terms of up to 364 days, and to be renewable (at the insurer’s discretion) for a total duration of up to 36 months. Until SB1737 was enacted, Illinois was following the new federal rules. But the state’s new, stricter rules supersede the federal rules, and require short-term coverage to be limited to terms of no more than six months in Illinois.

Illinois Insurance Department: buyer beware

The Illinois Department of Insurance has warned consumers about high-pressure marketing tactics in which short-term health plans are sometimes disguised as ACA-compliant coverage.

In 2020, the Illinois Department of Insurance confirmed that the various consumer protections related to health insurance and the COVID-19 pandemic would not apply to short-term health insurance plans.

Who can get short-term health insurance in Illinois

Short-term health insurance in Illinois is available to residents who meet pre-established underwriting guidelines set forward by insurers. For residents of the Land of Lincoln, this generally means short-term plans are available for those under 65 years old (some insurers put the age limit at 64 years; Medicare coverage becomes available for most Americans once they turn 65) and in fairly good health.

Short-term health medical insurance plans typically include blanket exclusions for pre-existing conditions, so for someone who is in need of certain medical care or has a pre-existing condition these plans may be inadequate – we recommend you seek out a policy that will cover those healthcare needs.

If you need health insurance coverage in Illinois, your first step should be to check your eligibility for a special enrollment period that would allow you to enroll in an ACA-compliant major medical plan. There are a variety of qualifying life events that will trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Illinois. These plans are purchased on a month-to-month basis, so you can enroll in one (with a premium subsidy if you’re eligible) even if you’re only going to need it for a few months before another policy takes effect.

When should I consider short-term health insurance in Illinois?

There are times when a short-term health insurance plan might be the only realistic option, such as:

If you missed open enrollment for ACA-compliant individual market coverage (ie, Obamacare) or your employer’s healthcare plan, and do not have a qualifying event that would trigger a special enrollment period.
If you’re not eligible for Medicaid or a premium subsidy in the exchange, the monthly premiums for an ACA-compliant plan might simply be too costly. People who are ineligible for premium subsidies include:

Those who earn more than 400% of the poverty level (for 2021 coverage, that amounts to $51,040 for a single person; if your ACA-specific modified adjusted gross incomeis just a little above the subsidy-eligible threshold, there are steps you can take to reduce it).
People who are caught by the ACA’s family glitch

Which insurers offer short-term plans in Illinois?

As of mid-2020, there were at least nine providers of short-term health insurance policies in Illinois:

AdvantHealth
Companion Life
Everest Reinsurance
First Chicago (new as of 2020)
Golden Rule (UnitedHealthcare)
Health Alliance Medical Plans
Independence American Insurance Company
National General
United Security Health and Casualty Insurance Company

Blue Cross Blue Shield of Illinois previously offered short-term plans, but discontinued them in 2016.

A health insurance agent or broker can help you compare short-term health insurance plans in Illinois and decide which plan will provide the benefits that best fit your needs. None of the short-term plans in Illinois can have terms of more than six months, and they cannot be renewed. In addition, you will not be able to buy a policy from the same insurer after your first plan ends, unless you wait at least 60 days. So in Illinois, short-term health insurance should only be purchased if you know you’ll need it for no more than six months and you have another coverage arrangement lined up for when the short-term plan ends.

Even though you’ll only have the plan for a short while, you’ll want to pay attention to the specific healthcare benefits the plan covers. For example, most short-term health insurance plans do not cover outpatient prescription drugs. Some do include prescriptions in their covered benefits, but you’ll want to make sure that you’re not mistaking a prescription discount plan for real prescription benefits.

You’ll also want to understand whether the plan imposes specific dollar limitations on healthcare services such as inpatient hospital stays, surgery, etc. (in addition to the plan’s overall benefit maximum). Some websites that sell short-term health insurance also sell fixed indemnity health plans (which do have separate dollar limits on various services) and they often market both options together, despite the fact that they are different types of coverage.

You can contact the Illinois Insurance Department if you want more information about a health plan, or want to check the authenticity of a health insurance company or an agent/broker or business that is marketing a plan to you.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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