Can my ACA Health Insurance be cancelled?

If you ask this question because your insurer has threatened to cancel your coverage, or you have reason to think that they might. 

The short answer is YES. Many things can trigger the cancellation of your policy.  In this blog, we will explain these and recommend how to resolve the situation, and, if proper, find alternative coverage.

First, the Affordable Care Act (ACA) bans Health Insurance companies from canceling coverage except ‘non-payment’ [see footnote 1]. 

Reasons for losing health insurance coverage

If you keep up with your monthly premiums or the payment plan you have agreed with your insurer, and you won’t have your ACA compliant coverage withdrawn unless:

  • You have knowingly committed fraud, e.g., made a deliberately false claim
  • You have materially and deliberately misrepresented yourself, your dependents, or circumstances, e.g., on your application
  • Your insurer has ceased to offer your plan [see footnote 2] or exited the market.

My insurer is threatening to cancel my coverage

If your employer stops insurance coverage, they must give you at least 90-days written notice AND offer you an equivalent ACA-compliant plan if they continue to provide group insurance to their employees.  

This allows you to find and compare the coverage available from other health insurers.   If you bought your plan through your state exchange, you might find a wider choice of options through a qualified health insurance advisor. 

Health Insurance Marketplace options

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This may be bad luck. It may be inconvenient, but it is your opportunity to explore the marketplace for a more affordable plan that closely matches your needs.

By far, the most common cause of threatened or actual cancellation is non-payment.

Most warning letters for non-payment are automated reminders that your monthly payment is overdue.  It happens to many people. 

If you have the funds:

  • Pay what is due before the grace period expires (this will vary from state to state).

If you do NOT have the funds:

  • Check with your insurer for the grace period (if you are receiving a premium tax credit, you have ninety days.) 

If you do not have the funds immediately: (but think you can afford the coverage in the long term)

  • Call and set up a repayment plan with your insurer, then get up to date soon.  

An important thing to remember: Do NOT let “I forgot” become a common excuse; you may eventually lose your coverage.

If you can no longer afford your ACA health insurance, seek advice from a licensed health insurance advisor.  

Should you not afford your ACA insurance match one (SEP) Qualifying Events, your advisor can help you find a new ACA plan.  Otherwise, they can help you find an affordable short-term insurance plan suited to your needs.  

If your income has changed substantially, you may be eligible for significant state or federal financial support.  In some states, you may qualify for Medicaid.  Your advisor will review your qualifications for various benefits and Cost Savings programs.

Very few of us enter into contracts not intending to keep our side of the agreement. The insurance companies understand this. If something happens that makes it impossible to pay your premium, contact your insurer at once. It is in everyone’s’ best interest to resolve the issue and for you to keep your coverage.

My insurance was just canceled. What should I do?

Employers provide insurance for most of the working-age population.  If you are a group plan member and have questions about the reasons for cancellation, contact the plan coordinator.  

If you are individually insured, contact the advisor or Health Insurance Exchange (Private, State, or Federal) where you bought your plan.  If you feel there were errors in processing your payments or managing your plan, they will review everything and act on your behalf to resolve any problems. 

If you purchased your plan directly from the insurance company, contact them directly.

You must always supply all paperwork, communications, and correspondence between yourself and the insurer to help make your case.

The Covid-19 pandemic has had a considerable impact on healthcare and the national economy, and the unemployment rate is the highest since the great depression in 1933. Many people who have lost their jobs had employer-sponsored insurance.

If your health coverage was terminated due to a Covid-19 event, you qualify for the Special Enrollment Period (SEP).  The SEP lets you access an affordable ACA health insurance plan that matches your new circumstances.  

Footnotes

1. If you receive a premium subsidy and do not pay your premium by the end of your grace period (90 days), your insurer will terminate coverage with effect from the last day you were paid-up.  Had you made any claims after that date, they would be charged to you directly. If you are not receiving a subsidy, the period of grace is 30 days.
If you think your coverage may be canceled, the best plan is to contact your insurer right away. Most insurers will send unpaid bills/overdue accounts to collection agencies, which negatively affects your credit score. Do not wait. Talk to your insurer and explain your situation. Talk to your care providers; sometimes, Drs offer cash patients a lower price per visit than they charge the insurance providers! 

2. The choice of insurers acting through your state exchange is limited, sometimes to as few as two or three. Insurers need not offer many plans in all counties of your state.  They are also free to drop a particular plan if there is not an appropriate network of providers to meet the plan’s provisions, e.g., the essential services guaranteed by the ACA. They must give 90 days’ notice of their intention and to offer equivalent plans if available. However, this is your opportunity to explore the marketplace to find the most affordable plans suited to your needs. 

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