What are Short-Term, Limited Duration Insurance (STDI) plans?
STDI policies are Major Medical Health Insurance coverage, but they only last for a short time, and are non-renewable. STDI policies in Maryland end after three months and cannot be renewed. The policies are designed to fill short gaps in coverage when an individual is switching from one health insurance plan to another (example: you retired just a couple months before you qualified for Medicare, or you took a short break between an old and new job).
Short-term medical plans may have lower premiums as a direct result of offering less coverage. You should carefully consider the benefits you need before agreeing to purchase a short-term medical plan. Also, you should carefully consider other types of health insurance, such as a policy that provides longer term coverage, more benefits and/or for which you may qualify for tax credits through the
Maryland Health Connection to help pay the premium. Please see more information about the Maryland Health Connection below.
Are STDI policies required to comply with federal Affordable Care Act (ACA) requirements that Major Medical plans must follow?
These policies are NOT required to comply with federal ACA requirements, though they must cover certain benefits required under Maryland state law. Because these policies do not have to comply with the ACA, the insurance company may ask health questions in your application, and the plan may contain pre-existing condition limitations. This means that if you had an accident or a sickness before the short-term medical plan starts, the plan may not pay for any medical expenses related to your “pre-existing condition(s).” The short-term medical plan may have an annual or lifetime limit on benefits. This limit means that if you have a serious illness or major accident, the policy may not cover all of your expenses.
Short-Term, Limited Duration Insurance (STDI) Pros & Cons
- Major Medical insurance
- Must cover certain benefits required under Maryland state law
- Lower premiums than other Major Medical plans, as a direct result of offering less coverage
| - Not required to meet Affordable Care Act (ACA) requirements under federal law
- Not required to cover outpatient prescription drugs or maternity care
- Requirement to answer health-related questions on application (underwriting), may be denied or have coverage limited based on the answers to those questions
- After three months, coverage ends and cannot be renewed or continued
- Due to the STDI three-month limit, if your gap in coverage lasts more than three months you could lose health insurance options available to you earlier, such as COBRA.
- May not include coverage for your pre-existing conditions
- May include a dollar limit on your healthcare benefits
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Who Sells Short-Term Medical Plans?
Short-term medical plans are available from “admitted” insurance companies (i.e. companies authorized to sell insurance in Maryland) and surplus lines insurance companies. Admitted insurance companies, which are regulated by the Maryland Insurance Administration (MIA), are subject to Maryland’s insurance laws and the policies they issue may be protected by the Maryland Life & Health Insurance Guaranty Corporation. For more information on the Maryland Life & Health Insurance Guaranty Corporation, go to
mdlifega.org. A list of the admitted
insurers that offer short-term policies can be found here.
Surplus lines insurance companies can sell a short-term medical plan in Maryland only if the consumer cannot purchase a short-term medical plan from an admitted insurance company. Surplus lines insurance companies are not subject to the same laws as admitted insurance companies and are not subject to MIA oversight. Also, their policyholders do not have the protections provided by the Maryland Life & Health Insurance Guaranty Corporation. Additionally, a short-term medical plan offered by a surplus lines insurance company may only be sold to:
- a United States resident who will be traveling to another country within 30 days of the effective date of coverage; or
- a non-United States resident who is traveling to the United States within 30 days of the effective date of coverage for a purpose other than attending a Maryland college or university.
You should check with the MIA to confirm that the person trying to sell you a short-term medical plan is licensed. You can call the MIA at 800-492-6116 to check and to ask general questions about health insurance.
When shopping, keep in mind…
The open enrollment period for the ACA health plans typically runs from November 1st through January 15th. You may not enroll in an ACA health plan outside of the open enrollment period unless you have a major life event (for example – you have a baby, you get married, etc.) or you meet special circumstances. Find out more about the
qualifying major life events or special circumstances.
If you receive an unsolicited call regarding health insurance plans, consider ending the phone call immediately. If you must engage with the caller: get a name, phone number to call them back, and contact the Maryland Insurance Administration immediately at 800-492-6116 to confirm that the caller has a license to sell health insurance in Maryland.
Before you contact an agent or broker selling STDI or Excepted Benefit policies, contact the Maryland Insurance Administration at 800-492-6116 to confirm the agent or broker is licensed to sell health insurance in Maryland.
Get free help with your health coverage!
The Maryland Insurance Administration has a
Health Coverage Assistance Team (H-CAT) to assist consumers. If you have questions or concerns about health coverage for you or your loved ones, the H-CAT staff is here for you.
