Can You Cancel Health Insurance Anytime?

With so many options available for health insurance, it’s possible that you learn about more favourable policies while already covered by a plan.

Or, you may have switched your job and are eligible for a better health plan offered by your employer. Can you cancel your health insurance anytime you wish or like purchasing insurance, cancellation is only possible during certain times of the year?

Can You Cancel Health Insurance Anytime?

The answer is yes, you have the right to cancel your health insurance plan any time you want. However, you may not be eligible to get a new plan unless certain conditions apply. For many, this lapse in insurance can be troublesome. If you are enrolled in your company’s health insurance, you’ll need to check with your HR or benefits manager.

Can I Cancel My Health Insurance Without  A Penalty?

Unlike cancellation of car insurance, there is no penalty if you cancel your health insurance. However, it is not the same as making changes to your existing plan. Making changes to an existing plan may not be possible at any time during the year unless you fulfil certain life-changing events, like getting married, gaining or losing eligibility for a certain health plan, etc. Any changes made have to comply with IRS rules.

The only exception to the rule of zero penalties is Medicare recipients. If a Medicare recipient has a plan that involved the assignment of Medicare benefits to a private insurer, the recipient must notify the Health Care Financing Authorities (HCFA) before they change their health care plan. Otherwise, they may be penalised.

Can You Cancel Health Insurance When It Is Not Open Enrollment?

Open enrollment is only reserved for buying, renewing or changing your health care insurance. It has no say in when you can cancel your health insurance. Therefore, you can cancel health insurance even when it is not open enrollment.

Health Insurance Cancellation Laws

To protect individuals and groups from having their insurance cancelled by the company, health insurance cancellation laws are in place. State laws keep in check when insurance may or may not be cancelled. Generally, the protections apply to all plans, including those that were in place before 2010, when the Affordable Care Act was introduced.

Insurers typically can not cancel their client’s insurance plan even if they made a mistake on their form. This excludes intentionally missing out information that is key to the insurance provider, like the medical history of the client, their income, and other important personal information. Insurers have up to two years after a client purchases their plan to do a check and ensure the information is correct. If they find something that was kept hidden they may move to ask for an explanation for the misinformation or cancel the plan altogether if they so wish.

If the insurance company decides to cancel the plan altogether, they have to give a 30-day notice period to the client. This notice period may vary depending on the plan that the individual has. For instance, if you received a subsidy on your plan through the ACA, you may receive a 90-day notice. Similarly, state laws vary for individuals who do not qualify for a subsidy, and hence, your notice period may vary as well. This grace period ensures that clients are able to secure either another insurance or go for an appeal.

Besides giving the wrong information, health insurance cancellation laws allow your insurance to be cancelled if you fail to make the payment on your premium. Again, the company has to wait until the grace period ends to cancel your insurance.

Companies are not allowed to cancel insurance in case of emergencies or during pregnancies.

How To Cancel Health Insurance

Besides insurance companies, clients themselves may want to cancel their health plan due to a variety of reason. How you cancel your health insurance plan depends on whether it was an individual plan or one provided by the company.

How To Cancel Health Insurance By Your Employer

To cancel your employer’s health care plan, it’s a good idea to start with your company’s HR. Ask them what the policy on your plan is and how can the plan be cancelled. You may need to provide your HR with paperwork and documents to process as part of the cancellation. The IRS provides with two scenarios that allow for group health care benefits to be revoked. One is if the employee’s duties and the number of hours changed within the company and secondly if the employee wanted to purchase the insurance from the marketplace through an open enrollment period or the special enrollment period.

How To Cancel Individual Health Insurance

Individual health insurance cancellation can be as easy as just giving a call to your health insurance provider. Some insurance providers may have more detailed steps involved. You should begin with calling on your insurance providers number that is written on the back of your insurance card and also on your premiums bills. After providing the necessary identification details, they may ask you to email or fax them your decision to cancel the insurance. Keep a note of all the cancellation numbers and the name of the representative that assisted you to cancel your insurance.

If you purchased your health insurance by yourself through, you can cancel it online through Blue Connect by following the steps below:

  1. Log in to your Blue Connect Inbox.
  2. Click on ‘Compose’
  3.  Select the topic of your message as ‘Cancel My Plan’
  4. Fill in the form and submit it.

Why Can’t I Cancel My Health Insurance?

The reason why you cannot cancel your health insurance may be the fact that you are going for a change in your policy instead of a cancellation. For instance, you may be asking your insurance provider to cancel your plan and give you another one instead. In this case, the new plan may not be available until open enrollment and that is becoming a hindrance in your cancellation. You may also be having trouble in cancelling your health insurance because some document or formality might not have been fulfilled.

If I Cancel My Health Insurance Do I Get A Refund?

Health insurance providers allow for refunds after you cancel your policy under special conditions. The amount of refund you get depends on a number of factors as well.

If you cancel your policy within the 14-day cancellation or free look period, you may be eligible for a refund. The free look period starts from the day you receive your policy documents. The insurance provider may deduct a small amount from your refund as administrative and cancellation charges. If you cancel after the free look period, you will have to consult your company for help. Each company has its own cancellation grid ie a table or grid of how much is refunded and now much is kept by the company. They may charge for any prorated premiums, as well as any medical examination expenses.

One thing to be kept in mind is that you must have nor made any claims on your insurance when you go for a cancellation.

In a nutshell,

health insurance can generally be cancelled anytime. You must check with your insurance provider before you purchase any policy about their refund grid. You may not be able to purchase a new policy after you cancelled your old one unless you qualify for a special enrollment period after experiencing a life-changing event.

Charles Bains

Charles Bains

Charles Bains started his insurance career as a marketing intern before pounding the pavement as a commercial lines agent in Orlando, FL. As an industry journalist, his articles have appeared in a variety of trade publications. His insurance television career, short-lived but glorious, once saw him serve as the expert adviser on an insurance-themed infomercial (yes, you read that correctly). Having recently worked for various organizations, coupled with his broader insurance knowledge, Charles is able to understand our client’s needs and guide them accordingly. He is a gem for Insurance Noon as his wide area of expertise and experience have been beneficial in conducting further researches to come up with solutions and writing them in a manner which is easy for everyone including beginners to comprehend.