Comparing child-only health insurance

by Tony Novak, CPA, MBA, MT

8/11/2013 - For 2013 there are at least two national providers of health insurance for a child when a parent or guardian is not also applying for coverage. This relatively rare type of coverage is used to meet parental obligations under family court orders. Parents sometimes use this coverage to save money and this leads to a situation where the parents and children are not covered under the same policy.

U.S. insurance carriers withdrew from this market following passage of the Affordable Care Act and few have returned to serve this niche market. The two most widely available choices are Time Insurance from Assurant Health (hereafter "Time") and Smart Short Term Medical Insurance from Markel Insurance Company (hereafter "Smart").

Both of these policies are exempt from the comprehensive coverage requirements for major medical insurance offered under the Affordable Care Act and both offer substantially less coverage than afforded under these reform policies.

The purpose of this article is to compare the consumer features of these two options. The article lists only those features where there are discernable differences and ignores the many aspects of coverage where there is no significant differentiation.

Type and length of coverage

Time is renewable limited benefit medical insurance with a 12 month policy period and no specified duration. Smart is short term major medical insurance with a 6 month policy period.

Maximum Coverage

Smart uses a $1 million maximum lifetime benefit limit. Time has a $1 million to $3 million limit, depending on which policy you choose.

Coverage of pre-existing conditions

Both policies cover the cost of treating pre-existing medical conditions in the first year. Time limits the exclusion to one years; Smart policy exists for a maximum of 6 months.

Issuance and policy delivery

Smart is issued immediately with an online application and the policy can be downloaded and printed locally. Time underwriting takes longer but actual policy issue times were not examined as part of this comparison.

Ambulance coverage

Smart includes $250 coverage for ground and air ambulance. Time offers $100 for ground ambulance and $1,000 for air ambulance.

More information

Sample policy certificates on both policies are available directly from the company, your state insurance department, an agent or navigator. Since coverage varies by state and the policy form changes over time, it is always best to review an actual issued policy during the 10 day free look period.

Tony Novak is a navigator for the Members Insurance Exchange through Freedom Benefits that offers both of the policies mentioned in this article. He is responsible for developing online consumer shopping information and publications but does not offer to sell insurance directly as an agent or broker.

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