Curbing Insurance Cancellations
The Affordable Care Act stops insurance companies from cancelling your coverage just because you or your employer made a mistake on your insurance application.
What This Means for You
Before the Affordable Care Act, if your insurance company found that you’d made a mistake on your insurance application, they could:
- Take away your coverage
- Declare your policy invalid from the day it started
- Ask you to pay back any money they’ve already spent for your medical care
It’s now illegal for insurance companies to cancel your coverage simply because you made an honest mistake or left out information that has little bearing on your health. Learn more about insurance cancellations.
Some Important Details
- These protections generally apply to all health plans, including grandfathered plans, whether you get coverage through your employer or buy it yourself.
- Your insurance company can still rescind your coverage if you intentionally put false or incomplete information that is material to the coverage on your insurance application.
- Your insurance company may also be able to cancel your coverage if you fail to pay your premiums on time.
- You must receive at least 30 days’ notice from your insurance company before it can rescind your coverage, giving you time to appeal the decision or find new coverage.
- If your plan is cancelled, you have several options, including a Special Enrollment Period. Learn more about your options when your plan is cancelled.
For More Information
- Find detailed technical and regulatory information on rescissions (cancellations).
- Learn more about cracking down on frivolous cancellations.
Content last reviewed on February 26, 2015