You may be familiar with short-term health insurance as a product that can help fill the coverage gap for recent college graduates and people who are unemployed and are not eligible for group health coverage continuation benefits.

Today, employers are finding another use for short-term health insurance: Offering it to new hires as a voluntary, employee-paid product that can tide employees over during the waiting period they must get through before they can qualify for standard health benefits.

Employees may have to fill out a simple underwriting questionnaire or even go through a medical exam to qualify for short-term health coverage, and deductibles may range from $250 to $2,000.

New employees may be able to buy short-term coverage for as little as $50 per month, and a typical policy provides ample coverage for emergency care, intensive care and hospital care.

Employers also might consider offering short-term medical to departing employees as an alternative to COBRA coverage. Employees who opt for short-term coverage may lose the right to get access to individual coverage on a guaranteed-issue basis after exhausting COBRA benefits, but for some departing employees, the relatively low cost of short-term coverage might make it an attractive alternative.

Debra Bowles is president and chief executive officer of Blue Shield of California Life & Health Insurance Company, San Francisco.

Jo-D Parisi is president of Parisi Insurance, Carmichael, Calif., an agency that sells short-term health insurance along with other forms of individual and small group health coverage.


Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.