There are several reasons you may need to cancel your health insurance policy. Open enrollment is a popular time to switch up your health insurance, but other circumstances could cause you to cancel your current health insurance plan.
For example, if you’ve started a job with new health benefits, recently turned 65 and qualify for Medicare, or got laid off, you would qualify for a special enrollment period to cancel or enroll in a new health plan.
The steps you should take to cancel health insurance coverage will depend on various factors. These factors include your health insurer’s protocols, reasons for canceling, and whether your plan covers your dependents.
In this blog, we’ll give you key guidelines on canceling your medical insurance and cover the five steps you’ll typically take when changing your health insurance coverage.
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Can you cancel your health insurance policy at any time?
If you have self-only or family coverage purchased through the individual health insurance market, you can cancel your plan anytime. However, you typically will only be able to select a new health plan during open enrollment, which is usually around November 1 to January 15.
If you have group health insurance through your employer, you’re not allowed to cancel your policy at any time. To cancel your employer’s health plan outside your company's open enrollment period, you must experience a qualifying life event and trigger a special enrollment period.
If you’re eligible for a special enrollment period, you can cancel your current health plan and choose new self-only or family coverage without waiting for open enrollment. This period is generally a 60-day window, starting from the day of your qualifying life event.
Once the 60-day period has passed, you’ll have to wait until your state’s open enrollment period to enroll in a new plan or change your current coverage unless you have another qualifying life event. If you’re enrolling in an individual marketplace plan, you should check if you’re eligible for savings through premium tax credits or other cost-saving subsidies.
Steps to follow when canceling or changing your current health insurance policy
1. Call your health insurance marketplace or insurance company
If you're canceling a state or federal marketplace plan, you can cancel the individual policy by logging into your account and terminating the plan’s coverage. You can also call their customer service team if you need help canceling your marketplace coverage online.
You can contact your insurance company directly if you're canceling a privately purchased health insurance plan. Your health insurer's phone number is on your policy, health insurance card, and premium bills.
Your health insurance provider may allow you to cancel over the phone. Sometimes, they may require you to fax or mail them additional documents, like a confirmation letter.
2. Follow the steps confirmed by the insurance representative
Every health insurance company has a cancellation process that you must follow, such as confirming your policy end dates are correct so that you don’t have a gap in health coverage.
During your online cancellation or phone call, an insurance representative will confirm all the steps you must complete to cancel your insurance plan successfully.
Finally, note the representative’s name and any cancellation confirmation numbers. This is important in case any administrative procedure errors occur during the process.
3. Ask about a premium refund and check your bank statements
If you paid in full for a one-year individual policy and want to cancel it before it ends, ask your health insurance company if they can reimburse your remaining monthly premium amounts. Many companies will issue a refund for the time left on your policy.
You should also check your bank statements after your new health insurance coverage starts to ensure the canceled plan isn’t still in effect. You’ll also want to ensure your new policy is active under the latest monthly payment amounts.
4. Before purchasing a new policy, check your active health coverage
Don’t cancel your old policy until you have secured a new policy and reviewed the coverage effective date. At the same time, make sure the active coverage periods don’t overlap because you can’t legally submit claims to two different major medical policies.
If your employer reimburses you for your insurance premium or other out-of-pocket medical expenses through a benefit like a health reimbursement arrangement (HRA) or health stipend, double-check your monthly health allowance. This amount may affect how much you want to pay for your policy and the type of medical bills you may encounter.
Also, check which type of HRA your company is providing. Integrated HRAs supplement employer-sponsored health insurance plans to help pay for deductibles, copays, medical services, and other out-of-pocket expenses, but they can’t reimburse health insurance premiums.
5. Know your rights and health insurance cancellation laws
Each state has consumer protection laws and insurance regulators available to help you with questions or complaints you may have about your individual coverage.
Your state’s laws may cover health coverage requirements, prompt payment of claims, access to certain specialists and medical care providers, and coverage of specific treatments and medical services. To protect your access to health services, these protection laws apply to all plans, whether individual coverage or an employer-provided health insurance plan.
A health insurance company can cancel your policy if you put false information on your application. But they can't cancel your coverage if you made an honest mistake on your application.
Your provider can also terminate coverage if you have overdue premiums. In most cases, your health insurance company must give you at least 30 days' notice before they can cancel your coverage due to missed monthly payments. This notice gives you time to appeal the decision or find a new cost-effective policy.
While you can terminate individual health insurance coverage at any time, you can’t usually enroll in a new plan at any time. If it’s not open enrollment, make sure you qualify for a special enrollment period so you have plans in place before canceling your medical care. This way, your access to health services will continue, and you’ll never miss out on medical care.
If you need assistance, an insurance broker or the customer service department (if you have a marketplace plan) can be a helpful resource in canceling your current plan and selecting a new policy to purchase.
This article was originally published on August 26, 2020. It was last updated on February 24, 2023.