Compliance News Week Ending August 15, 2025 - Short-Term Limited Duration Insurance; Court Decision - MHPAEA Enforcement

In this Article

1. Short-Term Limited Duration Insurance - Possible Resurgence?
2. Court Decision - MHPAEA Enforcement

Short-Term Limited Duration Insurance - Possible Resurgence?

Individual short-term limited duration insurance (STLDI) plans are not subject to the same requirements as comprehensive individual health insurance and may exclude coverage for pre-existing conditions. Historically, STLDI plans were limited to a maximum of three months of coverage. In 2018, the Trump administration expanded these plans, allowing for initial coverage of up to 12 months with renewals permitted for up to 36 months total. In contrast, the Biden administration issued final rules—effective in late 2024—restricting STLDI coverage to a maximum of three months, with a one-month extension permitted in certain cases and requiring enhanced consumer notices.

Recent guidance from the Trump administration indicates an intent to roll back the Biden-era restrictions and restore the longer duration limits, potentially allowing policies to extend up to one year with renewals for a total of three years. While formal rulemaking is pending, the administration has announced that it will not enforce the 2024 rules in the interim.

Note: Despite this federal non-enforcement stance, many states continue to impose their own restrictions on, or may even prohibit, STLDI plans.

The U.S. Departments of Labor, Health and Human Services, and Treasury statement

Court Decision - MHPAEA Enforcement

A recent federal district court's ruling in Perrone v. Blue Cross Blue Shield of Michigan reinforces that health plan participants can pursue Mental Health Parity & Addiction Equity Act (MHPAEA) claims under ERISA, making clear that mental health parity violations are judicially enforceable.

This decision contributes to a growing body of case law showing that courts are willing to entertain MHPAEA lawsuits claiming a lack of parity in how a plan treats mental health or substance use disorder (MH/SUD) benefits compared to medical/surgical ones. The case highlights the growing importance of proactively auditing any financial requirements or treatment limitations imposed on MH/SUD benefits—particularly non-quantitative treatment limitations (NQTLs) like network restrictions and utilization management—and thoroughly documenting these reviews as part of the required NQTL written comparative analysis.

The full text of the court opinion

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