Availability of short-term health insurance in Illinois

Yes. As of 2024, at least six insurers were offering short-term health insurance in Illinois.

But short-term health insurance will no longer be available for purchase in Illinois starting in 2025, under the terms of legislation the state enacted in 2024.¹

As of early-mid 2024, short-term health insurance in Illinois is limited to six months. Starting in September 2024, federal rules will limit short-term policies to terms of no more than three months (state law prohibits renewals). And Illinois enacted legislation in 2024 banning the sale of short-term plans altogether, starting in January 2025.¹

The current rules, which have been in effect for several years, stem from HB2624/SB1737, which was enacted in 2018. Former Gov. Rauner vetoed the legislation, but lawmakers overrode his veto and the new limits on short-term plans became law.

The amended version of the 2018 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 requires 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.

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 or 64.5 years; Medicare coverage becomes available for most Americans once they turn 65) who do not have any of the medical conditions that will result in a declined application.³ But the specific requirements vary from one insurance company to another.

Short-term health insurance plans generally have blanket exclusions for pre-existing conditions, and they often use post-claims underwriting. This means that if an enrollee has a claim, the insurer can look back at their medical records to ensure that the claim isn’t related to a pre-existing condition.⁴

Short-term health plans also generally exclude coverage for some of the ACA’s essential health benefits — most commonly, maternity care, prescription drugs, and mental health care³ — and impose dollar limits on the coverage they do provide. It’s important to double-check all of the coverage details before purchasing a short-term policy, to make sure that you understand the limitations of the plan.

If you need health insurance coverage in Illinois outside of the annual open enrollment period for ACA-compliant major medical plans (November 1 to January 15), you should check your eligibility for a special enrollment period that would allow you to enroll at that point.

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.

Here are some situations where short-term health insurance might be among your only options for coverage:

• 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.
• You’re not eligible for Medicaid or a premium subsidy in the exchange, and the monthly premiums for an ACA-compliant plan might not fit in your budget.
• In most cases (especially through 2025 as a result of the American Rescue Plan’s subsidy enhancements), people who don’t qualify for premium subsidies are paying no more than 8.5% of their household income for the second-lowest-cost Silver plan in the Marketplace. But undocumented immigrants are not eligible for subsidies even if their income is low, and might find that a short-term plan is their only realistic option.

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; that continues to be the case.

(As noted above, additional legislation was enacted in 2024 that will ban short-term health plans altogether in Illinois, starting in 2025. And plans issued between September and December 2024 will have to comply with new federal rules that limit short-term policies to terms of no more than three months.)

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 superseded the federal rules, and require short-term coverage to be limited to terms of no more than six months in Illinois.

The Biden administration finalized a rule change in 2024 that caps short-term plans at initial terms of no more than three months, for plans issued starting in September 2024. Illinois rules will continue to prohibit the renewal of short-term plans. And as noted above, Illinois will no longer allow the sale of short-term plans starting in 2025.