Filling the Coverage Gap for New Marketplace Plans

Short Term Medical Insurance


Short term health insurance for temporary gaps in coverage.



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Please note, our Short Term Medical insurance is intended for temporary gaps in health insurance.  It is not compliant with the federal Affordable Care Act and does not cover expenses related to pre-existing conditions.

Those who sign up for a plan in the Marketplace face a coverage gap of 15 to 45 days. If you’re planning to enroll in Marketplace coverage during the Open Enrollment period for 2016, you won’t be alone in trying to figure out how to fill your coverage gap.

Open Enrollment for 2016

If you’re enrolled in a 2015 Marketplace plan, your benefit year ends on December 31, 2015. To continue your health coverage into 2016, you can renew your current health plan or choose a new health plan during the 2016 open enrollment period.

  • You may have to pay a fee if you don’t have health coverage during 2016. The fee in 2016 increases to 2.5% of your income, or $695 per adult/$347.50 per child, whichever is more.
  • Open enrollment for 2016 runs from Nov. 1, 2015, to Jan. 31, 2016. If you haven’t enrolled by the end of this period, you can’t buy Marketplace health coverage for 2016 unless you qualify for a special enrollment period.

Understanding the ACA Coverage Gap

If you’re planning to enroll for a Marketplace plan during Open Enrollment, you need to understand the coverage gap involved. During Open Enrollment, if you enroll:

  • Between the 1st and 15th days of the month, your coverage starts the first day of the next month. For example, if you enroll on Jan. 1, your coverage starts on Feb. 1.
  • Between the 16th and the last day of the month, your coverage starts the first day of the second following month. So if you enroll on January 16, your coverage starts on March 1.

Depending on when you enroll for a Marketplace plan, you could face a coverage gap of 15 to 45 days. So how do you handle a coverage gap? You can take the risk of going uninsured for that period, or you can look into a short-term policy to bridge the gap.

Filling a coverage gap with short-term medical insurance

Short-Term Medical (STM) is health insurance that’s designed to cover people younger than 65 through temporary situations such as waiting for their Marketplace coverage to start. You choose the deductible, coinsurance, and length of coverage so you’re prepared in the case of a medical emergency.

STM is not a permanent health insurance solution. Since it does not meet the essential minimum requirements of an ACA-compliant plan, you will be subject to the tax penalty if you choose to only purchase short term coverage throughout the year.

However, STM is a great complement to your ACA plan, since it will cover you during the waiting period after purchasing your ACA plan. Coverage for STM policies can be as short as one month, and you can tailor the length of coverage to your situation.

For example, you can buy an STM policy that fills a 30-day coverage gap from January 1 until your Marketplace coverage begins on February 1.

Or let’s say you face a 45-day gap. You bought a Marketplace plan on January 16 and your Marketplace coverage won’t start until March 1. With STM, you can buy a 45-day plan that will keep you covered until your Marketplace coverage takes effect.

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