Small Businesses Applaud Administration’s Efforts to Restrict Short-term Health Insurance Plans

“The small business community is thrilled the Biden Administration is cracking down on “junk insurance” by proposing restrictions on short-term health insurance plans that will help lower healthcare costs for small business owners, self-employed or small business employees, more than half of which are enrolled in the Affordable Care Act (ACA) marketplaces. 

This long-awaited decision was necessary to curtail the Trump Administration’s rule intended to undermine the ACA by allowing insurance companies to sell so-called short-term insurance plans that last up to 364 days and can be renewed for up to three years. This Trump-era policy pulled many healthy people away from the ACA marketplaces who depend on these marketplaces for quality, affordable insurance. 

Short-term health insurance is meant to fill an individual’s coverage gap in job loss or other life changes. Although these plans are inexpensive, they can come with hefty deductibles. They are also not compliant with ACA requirements and not required to cover essential health benefits like prescription coverage or mental health treatment. Short-term health insurance plans can create an unbalanced risk pool that disrupts the individual marketplaces and raises costs for everyone who remains in those marketplaces. As small business owners start to think about the 2024 open enrollment period, it is important to do all that we can to lower costs for small businesses already concerned about access to quality and affordable healthcare.

We applaud the President’s action to limit disruptions to the healthcare marketplaces that small businesses depend on and encourage policymakers to steadfastly support access to affordable healthcare to help small business owners generate economic growth and create jobs.”

###