You may need to cancel your health insurance policy for a number of reasons. This is usually carried out during Open Enrollment. You might, however, need to cancel your current health insurance policy outside of that time frame due to other circumstances.

For instance, you might want to sign up for their plan if you recently started a new job that provides health insurance. You may also want to switch to Medicare if you are eligible for it and you recently turned 65. You might be eligible for a special enrollment period (SEP) to cancel your current individual health plan or sign up for a new one if you were laid off or had a change in your circumstances.

How you should go about terminating your health insurance coverage depends on a number of factors, including the terms set forth by your health insurer, the reason for the cancellation and whether your plan covers your dependents. In the article below, we’ll go over important rules you should be aware of.

Can you cancel your health insurance policy at any time?

Depending on your type of coverage, you may be able to cancel your health plan whenever you want.

The general guidelines are as follows:

• If you bought family or self-only coverage on the individual health insurance market, you can cancel your plan at any time.
• However, the annual Open Enrollment Period is usually the only time you can choose a new health plan. In most states, open enrollment runs from November 1 to January 15. A qualifying life event (QLE), which enables you to switch coverage, may also make you eligible for a SEP.
• Qualifying life events can include:
• Loss of prior health coverage, such as when a parent’s plan is canceled
• Dropping coverage voluntarily is not considered a QLE.
• Household changes (such as marriage or divorce)
• ZIP code changes (if there are different plans available at your new residence)
• A new health benefit, such as a health reimbursement arrangement (HRA) is offered.
• Verify your eligibility for any premium tax credits or other cost-sharing reductions before signing up for an individual marketplace plan.
• If you have group health insurance through your employer, you usually cannot cancel your policy at any time.
• You must have a QLE in order to terminate your employer’s health plan outside of your company’s open enrollment period. A SEP will result from this.
• You can cancel whenever you want if you have COBRA.

Without having to wait for open enrollment, you can choose new self-only or family coverage and cancel your existing health plan if you qualify for a SEP. Usually lasting 60 days, this window for special enrollment begins on the day of your qualifying life event.

To enroll in a new plan or modify your current coverage after this time frame expires, you will have to wait until either your state’s individual Open Enrollment period or your employer’s group open enrollment period. If you have another qualifying life event, that is the only exception.

Certain SEPs only let you select a new plan in the same metal tier as your existing Marketplace plan.

Procedures for terminating or modifying your present health insurance policy

1. Give your insurance company or health insurance marketplace a call

You can terminate the coverage of a public health exchange-purchased plan by logging into your account and canceling the individual policy. If you require assistance terminating your online marketplace coverage, contact the platform’s customer support staff.

If you’re canceling a health insurance plan from a private exchange, you can get in touch with your broker or insurance company directly. Your policy, health insurance card and premium bills all include your health insurer’s phone number.

You might be able to cancel over the phone with your health insurance company. Before terminating your policy, they might occasionally ask you to mail or fax them extra paperwork such as a confirmation letter.

2. Observe the instructions provided by the insurance agent

Each insurance provider has a unique cancellation procedure. Verifying that your policy’s expiration dates are accurate is a typical step to avoid having a gap in your health coverage.

An insurance representative will verify the procedures you need to follow in order to successfully cancel your insurance plan during your phone call or online cancellation.

Make sure to write down the representative’s name, phone number and any confirmation numbers for cancellations. This is crucial in case you have any questions later on or if there are any administrative procedure errors during the process.

3. Check your bank statements and inquire about a premium refund

Ask your current health insurance provider if they can reimburse the remaining monthly premium amounts if you paid your entire premium for a one-year individual plan and wish to cancel before the end of the term. For the remaining time on your policy, many companies will give you a refund.

After your new health insurance coverage begins, you should also make sure the canceled plan is no longer in effect by looking at your bank statements. This will assist you in avoiding further billing errors and duplicate payments.

Finally, confirm that the new monthly payment amounts for your policy are in effect.

4. Examine your current health coverage prior to acquiring a new policy

Wait until you have obtained your new policy and examined the coverage details, including the effective date before canceling your previous one. By doing this, you won’t experience a coverage gap. Additionally, make sure there is no overlap in the active coverage periods.

There are coordination guidelines even though you are allowed to have two health insurance plans. Unless you designate primary and secondary insurance, you are legally prohibited from filing health insurance claims to two separate major medical policies.

Verify your benefit allowance again if your employer uses alternative coverage, like an HRA, to reimburse you for other medical costs or your monthly premium payments. How much you want to pay for your new policy and other plan-covered medical costs may depend on your allowance amount.

Verifying the kind of HRA your employer offers is also crucial. Employer-sponsored group plans, for example, benefit from integrated HRAs, which assist you in covering deductibles, copays and other eligible out-of-pocket costs. However, you cannot get your group plan premiums reimbursed.

5. Understand the laws governing health insurance cancellation and your rights.

Every state has consumer protection laws that guarantee you can get the medical care you need from your health insurance provider. Certain rights and protections are exclusive to group health plans, while others are only applicable to plans on private or public exchanges. However, under the ACA, many protections are applicable to all coverage.

The following are covered by federal and state consumer protection laws:

• Requirements for health coverage

• How medical claim payments must be handled by insurance companies

• Using the medical loss ratio rule, insurers are held accountable for rate increases.

• Your freedom to select the physicians of your choice for in-network care

• The legal medical services that you are entitled to, including the ten fundamental health benefits

• Protection against retaliation from employers if you notify the federal government about ACA violations1

• How your protected health information (PHI) is safeguarded by your insurance provider

• The appeals process for medical claims

Regarding the cancellation of your policy, you also have certain rights. For instance, if you provide false information on your application, a health insurance company may cancel your policy. However, if you made an honest error on your application, they cannot cancel your current insurance coverage.

If you don’t pay your premiums on time, your provider may also cancel your coverage. Generally speaking, if you miss a monthly payment, your health insurer cannot cancel your coverage without giving you at least 30 days’ notice. You have time to contest the ruling or submit payments after receiving this notice.

During Open Enrollment or a SEP, you can examine your coverage options to find a new more affordable policy if you are unable to pay for your current one.

Conclusion

You can typically only sign up for a new plan during certain times, but you can cancel an individual marketplace plan at any time. Before terminating your current policy, make sure you are eligible for a SEP if it isn’t Open Enrollment. In this manner, you won’t ever lose out on essential medical services and your coverage will continue.

If you need assistance, you can choose a new policy and cancel your existing one with the assistance of a broker or the customer service division of your insurer. Group health plan participants can seek advice from an employee benefits specialist or the human resources department team at their employer.