Junk Insurance Plans

The term “junk insurance plans” refers to health insurance policies known as Association Health Plans (AHPs) and short-term plans. AHPs allow small businesses, including self-employed individuals, to form an association to purchase health insurance coverage as if they were single large employer. Given that the rules that govern large group plans contain fewer patient protections than the rules for small-group and individuals plans, AHPs may cover fewer treatments and services than consumers anticipate. Short-term health plans provide health insurance coverage that is designed to fill temporary gaps in coverage. Pursuant to federal regulations, short-term plans have a maximum duration of up to 12 months and may be renewed for up to 36 months. Short-term plans are exempt from the definition of individual health insurance coverage under the Affordable Care Act. Consequently, they may discriminate against people with pre-existing conditions and are not required to provide coverage for benefits such as maternity services, prescription medications, and mental health services, among others.