In a Statement issued August 7, 2025, the Departments of Labor, Health and Human Services (“HHS”), and the Treasury (the “Departments”) have announced they will not enforce the current regulations for short-term, limited-duration health insurance contracts.
Background. Short-term, limited-duration health insurance is designed to provide temporary coverage for individuals transitioning between health insurance policies. Short-term insurance coverage often provides some protection to those who enroll by paying a percentage of hospital and doctor bills after the policyholder meets the specified deductible. It is not required to meet Affordable Care Act (“ACA”) standards.
Because it is exempt from the definition of individual health insurance coverage under the ACA, it is not subject to the ACA’s individual market requirements applicable to individual health insurance plans (e.g., the mandate to cover Essential Health Benefits, the prohibition on imposing pre-existing condition exclusions or limitations, etc.).
In 2024, the Departments had issued amended final regulations that restricted the maximum term of a short-term limited-duration insurance policy to no more than three months. In response, certain stakeholders expressed concerns that this limit could cause harm to some consumers, limit consumer options, and ultimately have little positive impact on insurance risk pools.
Executive Order 14219, entitled “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative,” directs Federal agencies to review regulations to identify those that may impose undue burdens on small businesses or significant costs upon private parties that are not outweighed by public benefits.
Statement. In response to Executive Order 14219, until future rulemaking is issued, the Statement says, “the Departments do not intend to prioritize enforcement actions for violations related to failing to meet the definition of short-term, limited duration insurance in the 2024 final rules. HHS encourages States to adopt a similar approach to enforcement. HHS will not, during this period, consider a State to be failing to substantially enforce the relevant individual market requirements under the Affordable Care Act, where a State adopts a similar approach to enforcement or, where applicable, applies its State law definition of short-term, limited-duration insurance.”