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How to cancel your health insurance policy

Written by: Elizabeth Walker
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Published on August 31, 2022.

Open enrollment is a popular time to switch up your health insurance, but it isn't the only circumstance that could cause you to cancel your current health insurance plan.

In fact, there are several reasons for canceling your health insurance. 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, including your provider’s protocols, reasons for canceling, and whether your plan covers your dependents.In this blog, we’ll give you key guidelines on how to cancel your medical insurance and offer five tips to help you make smart decisions when changing your health insurance coverage.

Learn how to use an integrated HRA with a group health insurance policy

Can you cancel your health insurance policy at any time?

If you have have an individual health insurance policy, you can cancel your health plan at any time. However, you typically won’t be able to select a new health plan outside of open enrollment, which is usually around November 1 to December 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 of your company's open enrollment, you would need to have a qualifying life event and trigger a special enrollment period.

If you’re an eligible person for a special enrollment period, you can cancel your current health plan and choose new healthcare coverage without waiting for open enrollment. This period generally lasts 60 days, starting from the day of your qualifying life event. Once the 60-day window has passed, you’ll have to wait until your state’s open enrollment period to enroll or change your current coverage.

Tips 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 plan online.

If you're canceling a privately purchased health insurance plan, you can contact your insurance company directly. Your insurer's phone number is printed on your policy, health insurance card, and premium bills.

Your provider may allow you to cancel over the phone or, in some cases, they may require you to fax or mail them a confirmation letter.

2. Follow steps confirmed by the insurance representative

Every health insurance company has a cancellation process that you need to follow, such as confirming your coverage end dates are correct so that you don’t have a gap in 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, make a note of 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 the policy ends, ask your health insurance company if you can be reimbursed for the premium amounts for the remaining months. Many companies will refund you for the time left on your policy.

You should also check your bank statements after you cancel your policy and your new health insurance coverage starts to ensure you’re not billed for the canceled plan and that your new policy is active under the new payments.

4. Before purchasing a new policy, check your current 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.

Also, check which type of HRA your company is providing. An integrated HRA can be paired with employer health insurance plans to help pay for deductibles, copays, and other out-of-pocket expenses, but it can’t be used to 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 healthcare providers, and coverage of specific treatments and services. These protection laws apply to all health plans, whether they be individual coverage or an employer-provided health insurance plan.

A health insurance company can cancel health insurance for individuals 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’re late with premium payments. In most cases, your insurance company must give you at least 30 days notice before they can cancel your coverage to give you time to appeal the decision or find new individual coverage.

Conclusion

While termination of individual health insurance coverage can happen 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, you’ll never have a gap in healthcare coverage and miss out on the care you may need.

If you feel like you need assistance, an insurance broker or the Marketplace customer service can be a helpful resource in canceling your current policy and selecting a new policy to purchase.

This article was originally published on August 26, 2020. It was last updated on August 31, 2022.

Originally published on August 31, 2022. Last updated August 31, 2022.
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