Gap Health Insurance
InsuranceGap health insurance is short-term coverage designed to bridge periods without comprehensive health insurance, such as between jobs, after aging off a parent's plan at 26, or while waiting for employer coverage to begin. Gap plans typically last 1-12 months and may not cover pre-existing conditions or essential health benefits required under the ACA. Common alternatives include COBRA continuation coverage (expensive but comprehensive), short-term limited duration insurance (affordable but limited), or special enrollment in an ACA marketplace plan if you qualify due to a life event like job loss. In Minnesota, residents losing coverage may qualify for MinnesotaCare or Medical Assistance depending on income, or can enroll in MNsure marketplace plans during a 60-day special enrollment period.
Related Terms
COBRA
Consolidated Omnibus Budget Reconciliation Act. A federal law requiring employers with 20+ employees to offer continued health coverage to employees and dependents who lose group coverage due to qualifying events like job loss or divorce. Coverage typically lasts 18-36 months and beneficiaries pay the full premium plus 2% administrative fee.
Short-Term Limited Duration Insurance
Health insurance that provides temporary coverage for gaps in coverage, typically up to 364 days. These plans are not required to cover essential health benefits, can deny coverage based on pre-existing conditions, and may have coverage gaps. Not available in all states.
Special Enrollment Period
A window outside open enrollment when you can enroll or change plans due to qualifying life events. You typically have 60 days before or after the event to enroll, ensuring life changes don't leave you without coverage.
More Insurance Terms
Accident Insurance
Supplemental insurance that pays benefits if the policyholder is injured in a covered accident. Pays a lump sum or scheduled benefits for accidents resulting in emergency room visits, hospitalization, fractures, or other specified injuries.
Actuarial Value
The percentage of total average costs for covered benefits that a health plan pays. Bronze plans have 60% actuarial value, Silver 70%, Gold 80%, and Platinum 90%. The remaining percentage is what consumers pay through deductibles, copayments, and coinsurance.
Affordability Test
Under the employer mandate, coverage is considered affordable if the employee s share of self-only premium for the lowest-cost plan does not exceed 9.12% (2023) of household income. If coverage is unaffordable, the employee may qualify for marketplace premium tax credits.
Age Rating
The practice of charging different premiums based on age. Under the ACA, insurers can charge older adults up to 3 times more than younger adults (3:1 ratio). Some states impose stricter limits on age rating.
Aggregate Deductible
A family plan structure where the entire family deductible must be met before insurance begins cost-sharing for any family member. All family members' expenses count toward the single family deductible amount.
Allowed Amount
The maximum payment your insurance plan negotiates with providers for specific services. In-network providers agree to accept this rate as full payment. If a provider charges more than the allowed amount and is out-of-network, you may face balance billing for the difference.
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