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Regulatory Proposals Call for Changes to Short Term and Supplemental Health Insurance

American Staffing Association Legislative Report

In this article, Joanne Roskey writes that changes may be on the horizon for short-term and supplemental health insurance if a pending federal regulatory proposal is finalized. The proposed rulemaking, REG-120730-21, 88 Fed. Reg. 44596 (July 12, 2023), seeks to make major changes to the current regulatory structure governing short-term, limited-duration insurance (STLDI) and hospital indemnity or other fixed indemnity insurance (HI/FI). The U.S. Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments), which share oversight and enforcement responsibilities over STLDI and HI/FI, announced the proposed rule in July. The public comment period on the proposal ended on September 11, 2023. Roskey outlines what is at stake if the regulatory proposal is finalized. She concludes that like the proposed changes to STLDI, the proposed changes to the HI/FI rules, if finalized, are likely to steer consumers away from these products and, by taxing HI/FI benefits, reduce the value of the benefits consumers will have available to cover otherwise unreimbursed medical expenses. Under the proposal, many of the new requirements would go into effect immediately upon publication of the final rule.