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Short-term Limited Duration FAQ

Short-term Limited Duration FAQ

Updated 02/26/2025

 

Short-Term Limited Duration Insurance Policies

You may find it necessary to purchase a short-term limited duration insurance policy (STLDI) under the following circumstances:

  • If you are between jobs and without group health coverage
  • While waiting for a health plan to start at a new employer
  • Mid-year while waiting for the annual open enrollment to purchase an individual health plan

What is Short-Term Limited Duration Insurance?

A short-term limited duration insurance policy (STLDI) is a health insurance policy that provides benefits for a limited period of time. There are important differences between STLDI policies and comprehensive health plans.

STLDI policies are:

  • Not required to cover pre-existing conditions.
  • Issued immediately upon receipt of application.
  • Not guaranteed renewable; an insurer can modify or discontinue the plan without notice.

Important protections under the Affordable Care Act (ACA) that are not included in STLDI policies are:

  • Essential health benefits (EHB): A standard set of health benefits that must be covered for plans both on and off the Marketplace. For a complete list of EHBs visit: www.Michigan.gov/HealthInsurance
  • Prohibition on annual or lifetime benefits
  • Protections against rescission
  • Cost-sharing limitations

Maximum Policy Duration

For plans issued on or after September 1, 2024, amended federal rules limit the coverage period for a short-term limited duration insurance policy (STLDI) with one insurer to three months, allowing a one-month extension for a maximum duration of four months within a 12-month period.

Policies sold before September 1, 2024, have a maximum duration of 185 days or less out of any 365-day period with the same insurer.

If you have questions about STLDI policies, DIFS is here to help. Call us toll free at 877-999-6442.

About DIFS

The mission of the Michigan Department of Insurance and Financial Services is to ensure access to safe and secure insurance and financial services fundamental for the opportunity, security, and success of Michigan residents, while fostering economic growth and sustainability in both industries.  In addition, the Department provides consumer protection, outreach, and financial literacy and education services to Michigan citizens. For more information please contact DIFS at 877-999-6442 or visit www.michigan.gov/DIFS.

Frequently Asked Questions

  • Short-term products can be offered off-Marketplace but are not considered to be minimum essential health coverage. Short-term limited duration policies are exempt from the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requirements, including guaranteed issue. See 45 CFR 144.103.

  • No. Amendments to the federal rules, issued on March 28, 2024, impose a new duration limit on STLDI of no more than three months with one issuer, allowing a one-month extension for a maximum duration of four months within a 12-month period. These requirements apply to STLDI plans issued on or after September 1, 2024.

The answers provided are not meant to be a substitute for legal advice.