Availability of short-term health insurance in Virginia

Under Virginia rules, short-term health insurance plans cannot have initial terms of more than three months, and if the plan is renewable, total plan duration cannot exceed six months. The plans also cannot be sold during the open enrollment period for ACA-compliant coverage.

(Note that as of 2024, at least one carrier appeared to be marketing plans with longer durations in Virginia. The Virginia Bureau of Insurance confirmed via email that such policies are not available for purchase, and that the carrier may be using a marketing template from other states. But if an application is submitted in Virginia, the initial term will be limited to three months with the possibility of a six-month duration if the plan is renewable. For plans issued starting in September 2024, total duration, including renewals, will be capped at four months, under new federal rules.)

Long-standing regulations in Virginia clarify that various state rules and regulations (including guaranteed renewability and coverage of pre-existing conditions) do not apply to short-term healthcare insurance plans as long as they are nonrenewable and have a duration of not more than six months.

But short-term health insurance in Virginia that is issued via out-of-state associations — which included all of the short-term plans that were available in the state as of 2024 — previously did not have to follow the same rules.

(For comparison, see group association short-term rules, versus individual short-term plan rules; the former does not have rules pertaining to renewability or general pre-existing condition protections, while the latter does.)

The result was that before mid-2021, most of the insurers that offered short-term plans in Virginia were offering plans with 364-day terms, in line with the relaxed rules that the Trump administration issued in 2018.

Virginia gained a Democratic trifecta as of 2020, with a Democratic governor as well as a Democratic majority in the Senate and House of Delegates following the 2019 election. So although the legislature passed bills in prior sessions that would have further relaxed the state’s rules for short-term plans (they were vetoed by the Democratic governor), the legislature took a different approach in 2020.

Under the terms of legislation that was signed into law in April 2020, the state’s rules for short-term plans became much stricter as of mid-2021. And the legislation applies to “any entity that is authorized to sell, offer, or provide a short-term limited-duration medical plan,” which includes in-state insurers as well as out-of-state associations.

(Out-of-state association plans do not have to comply with Virginia’s minimum benefit requirements for short-term plans.)

Limiting short-term health plans tends to be a goal among progressive lawmakers, as the plans are not subject to the ACA’s regulations and are thus lower quality than ACA-compliant coverage. To that end, SB404 and HB1037 were passed by Virginia lawmakers in 2020, and signed into law by Gov. Northam. Both bills called for the following changes, effective as of July 2021:

• Limit short-term plans to three-month terms. Renewals are still permitted, but the total duration of the plan cannot exceed six months.
• Prohibit the sale of a short-term plan if it would result in a person having short-term coverage for more than six months in any 12-month period.
• Prohibit the sale of short-term plans during the ACA’s annual open enrollment period (November 1 through January 15; Washington and Maine have similar rules).

The requirements in these bills were relaxed during the course of the legislative session. Initially, the bills called for maximum terms of three months, with no renewals, and also included a requirement that short-term plans have medical loss ratios of at least 85%, with rebates for consumers if medical loss ratios fall below that level. But that last provision was later eliminated, and the total duration rule was changed to six months instead of three.

The bills also initially called for an effective date of July 2020, but that was changed to July 2021. So although Virginia enacted fairly strong limits on short-term plans, there was a delay of more than a year before they took effect.

Another bill enacted in 2020 in Virginia, SB95, requires all state-regulated plans, including short-term health insurance plans, to cover preventive care (as defined under the ACA and implementation regulations in effect as of 2019) with no cost-sharing.

Lawmakers approved more lenient rules for short-term plans in 2018 and 2019, but Governor Northam vetoed the bills

Throughout most of 2017 and 2018, federal regulations limited short-term health insurance plans to no more than three months in duration, and prohibited renewals. New federal regulations for short-term plans took effect in late 2018 (allowing initial terms of up to 364 days and total duration, including renewal, of up to 36 months), but they are clear in noting that states may impose tighter regulations.

Lawmakers in Virginia passed legislation in 2018 that would have allowed short-term plans to have terms of up to 364 days (without the state’s current caveats for plans issued by in-state insurers) but Governor Ralph Northam vetoed it in an effort to protect consumers and the ACA-compliant risk pool.

Similar legislation (SB1240) passed in Virginia in 2019, but Northam vetoed it as well and lawmakers didn’t have enough votes to override the veto.

Short-term health insurance in Virginia can be purchased by applicants who meet the insurers’ underwriting guidelines.

In general, people can qualify for short-term health plans if they’re under 65 years old and do not have a specific medical condition that will result in a declined application.¹ But the underwriting rules vary from one insurance company to another.

Short-term health insurance plans typically exclude coverage for any pre-existing conditions, and they often use post-claims underwriting. This means that if a claim is filed, the insurer can look at the person’s medical history to ensure that the claim is not related to a pre-existing medical condition.²

Short-term health plans also generally exclude coverage for some of the ACA’s essential health benefits. The most commonly excluded are maternity care, prescription drugs, and mental health care.¹ And they typically impose dollar limits on the coverage they do provide.

It’s important to double-check all of the plan information before purchasing a short-term policy, to make sure that you understand the limitations of the plan.

If you need health insurance coverage in Virginia outside of the annual open enrollment period for ACA-compliant major medical plans, you’ll want to first check to see if you might be eligible for a special enrollment period that would allow you to enroll in an ACA-compliant plan.

A variety of qualifying life events will trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Virginia (a state-run platform called the Virginia Health Insurance Marketplace).

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.

Virginia has expanded Medicaid under the ACA, so you may find that you’re eligible for Medicaid, depending on your income.

Excluding coverage for pre-existing conditions can make short-term policies appear more affordable than ACA-compliant policies. However, that upfront affordability can quickly be wiped out by out-of-pocket expenses (like deductibles and coinsurance) or medical costs for a condition that isn’t covered by the plan.

Whether on the shores of Virginia Beach or riding high in the Shenandoah, you might find a situation where a short-term health plan might be a viable option, such as:

• If you missed open enrollment for ACA-compliant coverage and do not have a qualifying event that would trigger a special enrollment period.
• If you are newly employed and have a waiting period until you can be covered by your new employer’s health insurance plan; short-term insurance may provide a much more affordable (but less comprehensive) stopgap than COBRA or an ACA-compliant plan.
• If you will soon be eligible for Medicare and don’t have access to other health insurance in the meantime.
• If you’re not eligible for Medicaid or a premium subsidy in the exchange, an ACA-compliant plan might be unaffordable.