Read This Before You Cancel Your Health Insurance
Cancelling health insurance can be an intricate process. Every insurer has specific cancellation protocols to ensure a smooth transition.
Before canceling, ensure you have another policy in place (or alternative coverage such as Medicare), otherwise a fine may apply. Be sure to record the representative’s name and cancellation confirmation numbers so as to avoid confusion later on.
1. Know Your Rights
If you are considering canceling your health insurance, it’s essential that you understand your rights. While each insurer and plan differs, here are a few general guidelines you should abide by in order to safeguard yourself.
First, ensure you’re completely sure you want to cancel. Secondly, contact your insurer and follow their cancellation guidelines; each provider has different cancellation processes, with most providers requiring written documentation of both policy details and why you wish to withdraw them as proof.
Keep in mind that you can only enroll in new health insurance during an employer group’s open enrollment period every year or through special enrollment processes for life status changes such as marriage, moving, having a baby, changing jobs or qualifying for Medicare. If canceling coverage coincides with one of these events, cancellation could leave you unprotected for an extended period of time.
Your health insurance company should only cancel your policy due to nonpayment or fraud; they must give at least 30 days’ notice in order to allow you to find more cost-effective coverage options. Furthermore, should they deny you claims or end coverage prematurely they must inform you that you can appeal their decision and have it reviewed externally by an impartial third party.
2. Know Your Options
No matter if you need to cancel or purchase new health insurance coverage, it’s essential that you consider all available options before making your decision. Modifying plans could involve something as straightforward as updating details online or more involved like sending in a written request to your insurer for cancellation – after receiving one they should contact you to discuss what options exist and find an acceptable solution together.
If your employer offers cafeteria plans that allow premium payments from pre-tax dollars or you are enrolled in COBRA after losing your job, cancelling or changing plans can only occur during open enrollment periods each fall or in response to qualifying events such as marriage, birth of child, moving, etc. Individuals purchasing health insurance via marketplaces have more freedom in terms of canceling coverage at any time and setting specific dates when their plan will end.
Note that cancelling your plan could leave a gap in coverage until you find another plan – be sure to put one into place now to protect against medical bills that might occur between now and when your old coverage ends.
3. Know Your Requirements
Depending on the type of plan and state you live in, additional requirements may need to be fulfilled before canceling health insurance coverage. Some types require waiting periods before enrolling again while changing plans can result in gaps. Before making a decision it’s essential that all these details are carefully taken into account.
Know that in most cases, enrollment for similar plans won’t re-open until November-January unless special enrollment periods apply, such as losing your job, getting married/divorcing/having a baby etc. Additionally, Affordable Care Act Marketplace plans might prevent you from making changes during that period.
Finally, some states impose penalties on individuals who go without health insurance coverage. It would be prudent to check with your state in advance before cancelling health coverage to avoid potential penalties from them.
To obtain information regarding your cancellation process, contact your insurer directly. Their customer service number can be found on your health insurance card or monthly premium statement. During any conversations with them, it may be useful to take notes and request confirmation numbers so you have proof of communication between yourself and their representative.
4. Know Your Options
Your health insurance provider can cancel your coverage if you fail to pay premiums; however, they must give 30 days’ notice so you have enough time to find a policy suitable for your budget.
Individuals can only change their healthcare plans during open enrollment or special enrollment periods in the fall if they experience a qualifying life event, such as getting married, moving states, being laid off from their job, or suffering a family loss such as death in which case surviving spouse or children can enroll directly into new plans without needing to go through open enrollment again.
However, for people without qualifying life events – such as opening a Tinder account – cancelling health insurance outside of open enrollment may prove challenging. You won’t be eligible to sign up for new coverage until open enrollment rolls around again and it can often be challenging proving you meet eligibility criteria (e.g. new address) when making applications for new plans.
Before canceling your health insurance, it’s essential that you carefully consider all your options. Speak with your broker, employer benefits office or state health insurance marketplace about all available plans to you so as to make the right choice for your situation.