On August 7, the Departments of Labor (DOL), Health & Human Services (HHS) and the Treasury (the tri-agencies) announced the agencies’ intention to initiate a notice-and-comment rulemaking initiative to consider needed amendments to the regulations governing the definition of short-term limited duration (STLD) health insurance.

The tri-agency announcement said that between now and completion of that rulemaking initiative, the agencies “do not intend to prioritize enforcement actions for violations related to failing to meet the definition of STLD insurance, including the notice provision.”

Per the tri-agency announcement, the coming new rulemaking initiative arises from Presidential executive order (EO) 14219 which directs federal agencies to identify regulations that “may impose undue burdens on small businesses or significant costs upon private parties that are not outweighed by public benefits.” The tri-agencies have identified a 2024 final rule (“Short-Term, Limited-Duration Insurance and Independent, Noncoordinated Excepted Benefits Coverage”) as a regulation subject to the EO. The 2024 final rule (promulgated by the Biden Administration) amended the regulatory definition of STLD insurance for purposes of its exclusion from the definition of individual health insurance coverage. Generally, STLD health insurance is exempt from the Affordable Care Act’s (ACA’s) individual market requirements.

The tri-agency announcement is posted at https://www.cms.gov/files/document/statement-regarding-short-term-limited-duration-insurance.pdf.

Prospects: While it will take months, probably, for this new rulemaking initiative to work its way through the regulatory process, it seems likely it will result in a more generous definition of STLD health insurance. NAIFA will watch this process closely.

NAIFA Staff Contact: Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org.