Feds Change Short-Term Medical (STM) Regulatory Priorities

The U.S. Labor, Treasury, and Health and Human Services Departments issued a statement late last week indicating the Federal Government will not enforce a three-month duration limit on Short-Term Medical (STM) policies that began in 2024.

“Until future rulemaking is issued and applicable, 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,” according to the statement. The statement appeared on the CMS website with no press release issued or other publicity.

The Implications For Agents

• This statement makes clear the Federal Government isn’t prioritizing enforcing the 3-month limit on STM policies.

• The Federal statement means individual state regulations are more critical than ever to determine the availability of STM policies.

• The door is open for states to relax STM regulations, allowing more flexibility in STM structures and length.

• This process will be a state-by-state activity requiring agents to closely monitor what their state insurance regulators say about STM policies and durations.

• If your state decides to change the length of STMs to be as long as 12 months, STMs are a definite option to assist ACA clients who face increasing cost-shares and premiums for 2026.

• Hercules Health Solutions partners with numerous companies that are actively working to adjust their STM products to account for any state regulatory changes that occur from this Federal regulatory change.