The Duration Rule Is Currently Unsettled
Any article telling you exactly how long a short-term plan can last is oversimplifying, because the answer is in active transition.
The 2024 federal rule — applying to plans sold or issued on or after 1 September 2024 — limits short-term, limited-duration insurance to an initial term of no more than three months and a maximum of four months including any renewals. That rule technically remains federal law.
However, in August 2025 the Departments of Labor, Health and Human Services and the Treasury stated they do not intend to prioritise enforcement of that definition, including its notice requirement, pending new rulemaking, and encouraged states to take a similar approach. A revised federal rule has been on the regulatory agenda for 2026.
The practical consequence: in most states that permit these plans at all, longer durations — up to 36 months through renewals — have become available again. But state law operates independently, and a number of states impose their own duration limits or prohibit the product outright.
So there is no reliable national answer, and there may not be one when you read this. Confirm the current position with your state insurance department and the carrier before enrolling, rather than relying on any published figure including this one.
The Gap That Traps People
This is the most consequential thing in the article and it does not depend on the duration rules at all.
The expiration of a short-term plan is not a qualifying life event. It does not open a Special Enrollment Period on the Marketplace.
Losing employer coverage does trigger one. Letting a short-term policy run out does not. So a plan that ends in March leaves you waiting until the autumn open enrolment period, with coverage starting the following January, and nine months of exposure in between.
This is worse than it sounds because these plans are medically underwritten. If you develop a serious condition while covered, the insurer is under no obligation to issue you a new policy when the current one expires — and you now have a condition, no short-term option, and no route onto a comprehensive plan until open enrolment.
Anyone using short-term coverage needs a dated exit plan before they start: which comprehensive plan, triggered by what event, on what date.
What These Plans Actually Are
Short-term plans are not ACA-compliant coverage. Four differences define them:
Medically underwritten. You can be declined for a health history, and pre-existing conditions are excluded from coverage. This is the opposite of Marketplace plans, where neither is permitted.
Not required to cover essential health benefits. Prescriptions, maternity care and mental health services are commonly excluded entirely.
No cap on your exposure. ACA plans must cap in-network out-of-pocket spending — $10,600 for self-only coverage in 2026. Short-term plans have no such requirement, and some carry very high or effectively unlimited coinsurance exposure.
Available year-round, effective almost immediately. This is the genuine advantage: apply today, and coverage can begin as soon as tomorrow.
Check the Subsidy Before Anything Else
Before comparing premiums, find out what a Marketplace plan would actually cost you after premium tax credits.
People frequently compare a short-term premium against the full sticker price of a Marketplace plan without checking their subsidy eligibility. For anyone eligible for a meaningful premium tax credit, subsidised comprehensive coverage is almost always the better option — better coverage, no underwriting, a hard cap on exposure, and often a comparable or lower premium.
Note also that subsidy levels for 2026 may be lower than in recent years, so the calculation is worth redoing rather than assuming last year's answer holds.
Short-term coverage makes sense mainly where subsidies are unavailable or negligible — which usually means higher income — and where the gap is genuinely short.
Where It Genuinely Works
- A defined gap between employer plans, where COBRA is expensive and the new coverage has a known start date.
- Waiting out a new employer's waiting period, typically 30 to 90 days.
- Missing open enrolment with no qualifying event, as a stopgap until the next enrolment period — provided you can hold coverage that long.
- Healthy, no chronic conditions, no medications, not planning a pregnancy. The exclusions only work if there is nothing to exclude.
- Ineligible for subsidies and unable to absorb a catastrophic bill.
Where It Does Not
- Any chronic condition. The exclusion is the whole product. A plan that will not cover the thing you actually need care for is an expense, not protection.
- Pregnancy or planning one. Maternity care is almost universally excluded and the costs are entirely yours.
- Ongoing prescriptions. Frequently not covered, and spending on non-covered drugs counts toward nothing.
- Mental health care. Commonly excluded outright, including inpatient treatment.
- As a permanent substitute for comprehensive coverage. The lack of preventive care means screenings that a compliant plan covers at no cost simply do not happen.
- Where you qualify for meaningful subsidies. See above.
Disclose Everything on the Application
Because these plans are underwritten, the application is the whole contract. Insurers can and do review medical records after a claim is filed.
An omitted detail — a physiotherapy course, a consultation, a prescription — can support rescission of the policy and denial of the claim, leaving you with the full bill and no coverage. And the omission does not have to relate to the eventual claim in an obvious way.
Answer every question completely, including things that seem minor or long past. A policy issued with a rated or excluded condition still pays for everything else. A rescinded policy pays for nothing.
Reading a Short-Term Plan Properly
The deductible must match your actual savings. A $10,000 deductible on a plan costing very little is only insurance if you hold $10,000. Otherwise you have bought protection against catastrophe and nothing else — which may be a legitimate choice, but it should be a deliberate one.
Find the maximum out-of-pocket, and check it exists. Unlike ACA plans, there is no legal requirement for a hard ceiling. A plan without one, or with a very high one, leaves your exposure open-ended.
Check the network, and how it prices. Some cheaper plans use reference-based pricing rather than a negotiated network, which can leave you balance billed for the difference between what the plan pays and what the provider charges. Verify that the hospitals and doctors you would actually use participate. See how to check network status.
Read the exclusions list in full. It is short, specific, and the most informative page in the document.
Two Products That Are Not Insurance
Health care sharing ministries are marketed alongside short-term plans and are not insurance. They are not regulated as insurance, and members have no legal right to have a claim paid. If a product describes payment as being at the discretion of members or a board, it is not an insurance contract.
Fixed indemnity and accident plans pay a set cash amount per event — a night in hospital, a broken bone — rather than a share of the actual bill. They can supplement a high-deductible short-term plan by providing cash toward the deductible, but they are not comprehensive coverage and should never be relied on as such. Federal rules require prominent disclosure that these are not comprehensive insurance, for exactly this reason.
Two Situations
The bridge that worked
Someone is laid off in February with a new role starting in May, and quoted a high monthly figure for COBRA. Healthy, no medications, no chronic conditions.
They take a short-term plan with a deductible matching their savings, disclose their full history on the application, and have a dated exit — employer coverage beginning on a known date.
An acute problem arises during the gap. The claim pays after the deductible and coinsurance, and the total cost is well below both COBRA premiums and the uninsured price.
Every element that made this work was decided in advance: health status, a real end date, a deductible they could fund, and honest disclosure.
The policy that was rescinded
An applicant does not mention several physiotherapy appointments from the previous year, considering them irrelevant.
Two months into the policy, surgery is required for a related condition. The insurer reviews the medical records, identifies the earlier treatment, and rescinds the policy for material misrepresentation. The claim is denied in full.
Had the history been disclosed, the outcome would have been either a policy with that condition excluded — leaving everything else covered — or a decline, which would have prompted a different plan. What produced the worst outcome was the omission rather than the condition.
Both are composite illustrations of common patterns, not accounts of specific individuals.
Before You Buy
- Check your subsidy eligibility for a Marketplace plan first.
- Confirm current duration limits with your state regulator and the carrier — the federal position is in transition.
- Write down your exit date and route, remembering that expiry is not a qualifying life event.
- Check whether your state permits these plans at all.
- Disclose your complete medical history.
- Match the deductible to money you actually hold.
- Confirm a hard out-of-pocket maximum exists.
- Verify the network and how it prices out-of-network care.
- Read the exclusions list.
- Confirm it is regulated insurance, not a sharing ministry.
Frequently Asked Questions
How long can I keep one?
Currently unsettled. Federal rules limit it to four months including renewals, enforcement of that definition has been suspended pending new rulemaking, and longer terms are again available in many states. State limits and outright bans also apply in some places. Verify before enrolling.
Does it count as coverage for tax purposes?
There is no federal penalty for lacking ACA-compliant coverage. Some states operate their own individual mandates, and a short-term plan generally does not satisfy them.
Will it cover my pre-existing condition?
No. Exclusion of pre-existing conditions is a defining feature of the product.
What happens when it expires?
You are uninsured unless you have arranged something else. Expiry does not open a Special Enrollment Period on the Marketplace, so plan the exit before you start.
Can I be denied a renewal?
Yes. These are underwritten, so a condition developing during the term can result in a decline at renewal.
Does it cover pregnancy?
Almost never. All prenatal and delivery costs would be yours.
Can I cancel early?
Usually, with unused premium refunded pro rata less any administrative fee. Confirm before purchase.
Is a health sharing ministry the same thing?
No. Those are not insurance, are not regulated as insurance, and carry no legal obligation to pay claims.
The Short Version
Short-term plans are a tool for a defined gap in someone who is healthy, has no meaningful subsidy available, and knows exactly when comprehensive coverage resumes. Used that way they work.
Two things to settle before buying anything. Check what a subsidised Marketplace plan would actually cost you, because for many people it is both cheaper and far better. And write down your exit — when this ends and what replaces it — because the expiry of a short-term plan does not open a Special Enrollment Period, and running out in March means waiting for open enrolment in the autumn.
Then disclose your entire medical history on the application. A rescinded policy is worse than no policy, because you paid for it.
Sources and Editorial Note
Duration limits derive from the final rules on short-term, limited-duration insurance issued by the Departments of Health and Human Services, Labor and the Treasury on 28 March 2024, applying to policies sold or issued on or after 1 September 2024, as described in the CMS fact sheet. In a joint statement dated 7 August 2025, the Departments said they do not intend to prioritise enforcement of that definition pending future rulemaking. A revised federal rule has been listed on the 2026 regulatory agenda, so the position may have changed since publication. State-level duration limits and prohibitions apply independently — see the NAIC overview.
ACA maximum out-of-pocket figures for 2026 are set by the Department of Health and Human Services. This article is general information, not medical, legal or insurance advice — confirm current duration rules, plan availability and coverage terms with your state insurance department and the carrier before enrolling, and do not delay needed medical care over a coverage question.
