How to cancel your health insurance policy

There are several reasons why you may need to cancel your health insurance policy. Typically, this is done during Open Enrollment. However, other circumstances could cause you to cancel your current health insurance policy outside of that time frame.

For example, if you’ve started a new job that offers health coverage, you might want to enroll in their plan. If you recently turned 65 and are eligible for Medicare, you might also want to switch to that plan. If you were laid off or experienced a life change, you may qualify for a special enrollment period (SEP) to cancel or enroll in a new individual health plan.

Your health insurer’s rules, the reason for canceling, and whether your plan covers your dependents are all factors in how you should approach canceling your health insurance coverage. We’ll walk you through key guidelines you’ll need to know in the article below.

In this blog post, you’ll learn:

• When and under what circumstances you can cancel your health insurance policy.
• The five-step process for canceling your health insurance.
• Your consumer rights and protections related to health insurance cancellations.

Can you cancel your health insurance policy at any time?

Whether you can cancel your health plan at any time depends on the type of coverage you have.

Here are the general rules:

• You can cancel your plan anytime if you purchased self-only or family coverage on the individual health insurance market.
  • However, you can typically only select a new health plan during the annual Open Enrollment Period. Open Enrollment is from November 1 to January 15 in most states. You may also qualify for a SEP if you experience a qualifying life event (QLE), which allows you to change coverage.
  • Qualifying life events can include:
    • Loss of previous health coverage (such as aging off a parent’s plan)
      • Voluntarily dropping coverage doesn’t count as a QLE
    • Changes in household (like marriage or divorce)
    • Changes in ZIP code (if your new residence has different plans available)
    • The offer of a new health benefit, like a health reimbursement arrangement (HRA)
  • If you’re enrolling in an individual marketplace plan, check if you’re eligible for premium tax credits or other cost-sharing reductions.
• You generally can't cancel your policy anytime if you have group health insurance through your employer.
  • To cancel your employer’s healthcare plan outside your company's open enrollment period, you must experience a QLE. This will trigger a SEP.
  • If you have COBRA, you can cancel at any time.

If you’re eligible for a SEP, 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 special enrollment window, starting from the day of your qualifying life event.

Once this time period ends, you must wait until your employer’s group open enrollment or your state’s individual Open Enrollment period to enroll in a new plan or change your current coverage. The only exception is if you have another qualifying life event.

If you have a Marketplace plan, some SEPs only allow you to choose a new plan in the same metal tier as your current plan.

Steps to follow when canceling or changing your current health insurance plan

Now that you know when you can cancel your health coverage, let’s go over how you can do so.

1. Call your health insurance marketplace or insurance company

If you're canceling a plan you purchased on a public health exchange, you can cancel the individual policy by logging into your account and terminating the plan’s coverage. Call the platform’s customer service team if you need help canceling your marketplace coverage online.

You can contact your insurance company or broker directly if you're canceling a health insurance plan from a private exchange. 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, before ending your policy.

2. Follow the steps outlined by the insurance representative

Every insurance company has its own cancellation process. One common step is confirming your policy end dates are correct so you don’t have a gap in health coverage.

During your online cancellation or phone call, an insurance representative will confirm the steps you must complete to cancel your insurance plan successfully.

Be sure to note the representative’s name, contact information, and any cancellation confirmation numbers. This is important in case any administrative procedure errors occur during the process or if you have questions in the future.

3. Ask about a premium refund and check your bank statements

If you paid your health insurance premium in full for a one-year individual plan and want to cancel it before it ends, ask your current provider if they can refund 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. This will help you avoid double payments and prevent further billing errors.

Lastly, ensure your new policy is active under the new monthly payment amounts.

4. Check your active health coverage before purchasing a new policy

Don’t cancel your old policy until you’ve secured your new policy and reviewed the coverage details, including the effective date. This will prevent you from having a gap in coverage. Additionally, ensure the active coverage periods don’t overlap.

While you can have two health insurance plans, there are coordination rules. By law, you can’t submit health insurance claims to two different major medical policies unless you designate primary and secondary insurance.

If your employer reimburses you for your monthly premium payments or other medical expenses through alternative coverage, such as an HRA, double-check your benefit allowance. Your allowance amount may affect how much you’ll want to pay for your new policy and other healthcare expenses under the plan.

It’s also important to check which type of HRA your employer provides. For instance, integrated HRAs supplement employer-sponsored group plans by helping you pay deductibles, copays, and other qualified out-of-pocket expenses. But your group plan premiums are ineligible for reimbursement.

5. Know your rights and health insurance cancellation laws

Each state has consumer protection laws that ensure your health insurance company provides you with access to necessary medical care. Some rights and protections only apply to plans on the public or private exchanges, while others only apply to group health plans. But, many protections apply to all coverage under the ACA.

Federal and state consumer protection laws address the following:

• Health coverage requirements
• How insurance providers must handle payment of medical claims
• Insurer accountability for rate increases using the medical loss ratio rule
• Your right to choose your preferred doctors for in-network care
• What medical services you can access under the law, such as the ten essential health benefits
• Protection from employer retaliation if you report ACA violations to the federal government¹
• How your insurance company’s secures your protected health information (PHI)
• The medical claim appeal process

You also have some rights regarding policy cancelation. For example, a health insurance company can cancel your policy if you put false information on your application. But they can't cancel your current insurance coverage if you made an honest mistake on your application.

Your provider can also terminate coverage if you have overdue premium payments. In most cases, your health insurer 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 make payments.

If you can’t afford your coverage, you can review your coverage options to find a new, more affordable policy during Open Enrollment or a SEP.

Conclusion

While you can cancel an individual marketplace plan anytime, you can usually only enroll in a new plan during specific periods. If it’s not Open Enrollment, ensure you qualify for a SEP before canceling your current policy. This way, your coverage will continue, and you’ll never miss out on necessary health services.

If you need help, a broker or your insurer’s customer service department can help you cancel your current plan and select a new policy. Individuals with a group health plan can contact their company’s human resources department team or employee benefits specialist for guidance.

This article was originally published on August 26, 2020. It was last updated on December 9, 2024.

1. Protection from employer retaliation