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U.S. District Court Upholds Short-Term Limited Duration Insurance Rule

The U.S. District Court for the District of Columbia upheld a rule that expanded the maximum length of time for short-term, limited duration insurance (STLDI). 

STLDI is coverage that lasts a limited period of time and is exempt from many of the requirements that apply to plans in the individual health insurance market. Concerned that STLDI was drawing healthy lives away from the individual health insurance market that the Affordable Care Act (ACA) sought to support, the Obama administration shortened the length of time an individual could enroll in STLDI from 12 months to three months. Seeing STLDI as a low cost alternative to individual insurance, the Trump administration reversed course. Final regulations issued last year restored the period to 12 months and allowed for up to two renewals, for a total period of 36 months of coverage. One month later, seven organizations representing small health insurers, mental health patients and providers, and others brought suit challenging these regulations.

The court denied the challenge. It found that the ACA–and HIPAA, which first introduced STLDI–did not define the length of time STLDI could remain in effect and that the U.S. Departments of Treasury, Labor, and Health and Human Services could extend the length of time STLDI may remain available to enrollees without posing a threat to the ACA’s “structural core.” 

The plaintiffs have already expressed their intent to appeal the decision. In the meantime, states continue to consider the question of whether and how to regulate the availability and terms of STLDI policies issued within their borders.

Copyright © by Ballard Spahr LLPNational Law Review, Volume IX, Number 207


About this Author

Edward I. Leeds, Philadelphia attorney, Ballard Spahr Law firm, Employee Benefits and Executive Compensationattorney

Edward I. Leeds concentrates on issues relating to the design, administration, and taxation of health and other welfare benefit plans. His practice has evolved with the laws and market forces that shape those plans. Mr. Leeds advises clients about compliance with the Affordable Care Act, HIPAA, HITECH, COBRA, cafeteria plan rules, and other legal requirements. He prepares clients for audits of their privacy and security measures under HIPAA and advises them about the rules governing wellness initiatives.

Mr. Leeds represents employers in the negotiation and drafting of contracts...

Paige A. Haughton Employment Lawyer Ballard Spahr Law Firm

Paige A. Haughton is an associate in the firm's Employee Benefits and Executive Compensation Group. She advises corporate and nonprofit clients on employee benefit and executive compensation matters. She assists clients with the design, administration, and governance of retirement, health and welfare plans. In addition, Paige works with clients to ensure compliance with applicable statutes and regulations, including ERISA, the Internal Revenue Code, HIPAA, and COBRA.

During law school, Paige served as a law school research assistant, researching and writing on insurance law matters. Paige also served as a legal intern in the Executive Office of Immigration Review at the U.S. Department of Justice, preparing bench memoranda and performing legal research to recommend outcomes in immigration cases.