Overview
These types of non-comprehensive plans include but are not limited to:
- Short-Term Limited-Duration Insurance — temporary coverage for gaps in major medical coverage such as between jobs or before new employer benefits take effect.
- Health Care Sharing Ministries — faith- or values-based sharing arrangements, not insurance, where members contribute funds to help pay one another's medical costs. Since these arrangements are not insurance and are not regulated as insurance, there is no legal guarantee that your medical costs will be paid.
- Fixed Indemnity Plans — policies that pay a set dollar amount per covered event (e.g., per hospital day), regardless of your actual medical bills. This type of plan is intended as a supplement to major medical coverage rather than a substitute.
While they serve different niches, they share a common limitation: none provides the full protections of ACA-compliant coverage. They may exclude pre-existing conditions, omit entire categories of benefits, or offer no legal guarantee of payment. They are best understood as stopgaps or supplements rather than primary health insurance. Even if you have one of these plans, you may still owe a tax penalty if you do not maintain ACA-compliant coverage, depending on your state's laws.
Eligibility
Eligibility, costs, and plan availability vary by state, income, household size, and individual circumstances.
Short-term limited-duration insurance availability varies widely by state. Potential applicants must typically pass medical underwriting, and pre-existing conditions may be excluded from coverage or used as grounds to deny the application entirely.
Health care sharing ministries require members to affirm shared religious or value beliefs and may impose lifestyle requirements such as abstaining from tobacco or limiting alcohol use. These organizations are not regulated by state departments of insurance.
Fixed indemnity plans are generally available to most applicants and are not considered major medical insurance, but a supplement to major medical coverage.
Enrollment
Short-term limited-duration insurance plans can be purchased at any time with no open enrollment restriction, and coverage can begin within days, if available. Short-term plans are not available in all states. Availability and duration limits vary significantly by state. Check your state's rules before applying.
Health care sharing ministries accept members year-round, though they may impose waiting periods of one to three or more years for pre-existing conditions.
Fixed indemnity plans can typically be purchased at any time as a supplement to major medical coverage.
If you recently lost job-based coverage or experienced marriage, birth, or relocation, you may qualify for a Special Enrollment Period to enroll in ACA-compliant major medical coverage. Subsidies may be available based on your income.
Approval
Short-term limited-duration insurance plans use medical underwriting as standard practice, and approval is not guaranteed. Someone with a pre-existing condition may be denied or find that their related medical needs are fully excluded from the policy.
Health care sharing ministries are not legally considered insurance. The approval process varies by health care sharing ministry.
Fixed indemnity plans may involve a short health questionnaire or may be guaranteed approval, depending on the insurer.
Important Considerations
None of these coverage types are ACA-compliant — they do not comply with certain federal market requirements for health insurance, including those for essential health benefits, annual/lifetime limits, preventive care, and guaranteed renewability.
Short-term limited-duration insurance is designed as temporary coverage for situations like the period between jobs or while waiting for employer benefits to begin. Short-term plans commonly exclude maternity care, mental health services, prescription drugs, and preventive care, and they may not include an out-of-pocket maximum. Their lower premiums reflect the reduced scope of coverage. State laws vary widely and this type of insurance is not available in all states. Always confirm specific rules in your state before enrolling.
Health care sharing ministries are faith-based or values-based organizations in which members share each other's medical costs. They may impose per-incident caps, annual caps, or lifetime caps on sharing. Members are responsible for all costs below a "sharing threshold" that functions similarly to a deductible. Because these organizations are not regulated by state insurance departments, members have limited recourse if a sharing request is denied.
Fixed indemnity plans pay a predetermined dollar amount per covered event, such as a flat daily rate for hospitalization, regardless of the actual charges incurred. They are intended as a supplement to major medical coverage rather than a substitute and are not ACA-compliant.
Even if you have one of these plans, you may still owe a tax penalty if you do not maintain ACA-compliant major medical coverage, depending on your state's laws. Some states have tax penalties for lacking ACA-compliant coverage. If you live in a state with an individual mandate, you may owe a penalty if you go without major medical insurance. Check your state's rules and the policy details carefully before buying.