US Departments Reviewing Short-Term, Limited-Duration Insurance Definition
TL/DR –
The U.S. Departments of Labor, Health and Human Services, and the Treasury announced a reevaluation of the definition of short-term, limited-duration insurance through a formal rulemaking process. Until the new rules are established, enforcement actions will not be prioritized against insurers who do not fully comply with the current 2024 definition. States are encouraged to adopt a similar approach, and will not be penalized for following the federal approach or applying their own definitions of short-term, limited-duration insurance under state law.
US Government Departments Revisit Short-Term Insurance Definition
The U.S. Departments of Labor, Health and Human Services, and the Treasury are reassessing the definition of short-term, limited-duration insurance (STLDI) through a formal rulemaking process, as announced on August 7. The aim is to streamline the regulations until the new rules are set in stone.
In the interim, insurers who do not fully comply with the 2024 definition of STLDI, inclusive of related notification requirements, will not be the focus of enforcement actions by these departments.
The Health and Human Services (HHS) department is urging states to adopt similar enforcement approaches. It has clarified that states that align with this federal approach or apply their unique interpretations of STLDI under state law will not face any penalties.
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