Is short-term health insurance “creditable coverage” under federal law?

short-term health quotes

No, Short Term Medical coverage is not considered ACA compliant. This means you are still subject to the penalty if you do not have ACA compliant coverage for at least 10 of the 12 months of the calendar year. Under federal law, if you have a gap in insurance coverage longer than 63 days, and you are diagnosed with a serious illness or become pregnant during that time, you will lose your health insurance rights to have these conditions covered by your next health insurance plan. Instead, the new health plan can impose a wait period of several months before you will be insured for these conditions.

Creditable coverage includes health insurance coverage under any of the following:

• a group health plan
• individual health insurance
• student health insurance
• Medicare
• Medicaid
• CHAMPUS and TRICARE
• the Federal Employees Health Benefits Program
• Indian Health Service
• the Peace Corps
• Public Health Plan (any plan established or maintained by a State, the U.S. government, a foreign country)
• Children’s Health Insurance Program (CHIP); or, a state health insurance high risk pool.

If you have prior creditable coverage, it will reduce the length of a pre-existing condition exclusion period under new job-based coverage.

That is why it’s important to have continuous health coverage under a “creditable” plan, such as short-term health insurance. Illnesses and conditions developed while on a creditable coverage plan will be covered on the date your new health plan becomes effective.