Can My Health Insurance Carrier Drop Me?

Health insurers can always end coverage options at the end of your annual benefits period, but there are other situations where your carrier may drop you early. Ensuring you pay your premiums and follow your carrier’s policy can help prevent you from being dropped prematurely, but even in situations where it's out of your control, there are generally other options to appeal the decision or enroll in coverage on a different health plan.

Keep reading to learn more about when your health insurance carrier can drop you and why, as well as the measures to take to resume getting the medical care you need.

Why Would a Health Insurance Carrier Drop Me?

Typically, a health insurance company will only drop your coverage outside the end of your annual benefit period if you’re found breaking the rules in the health plan’s policy. However, some instances where there are requirements for your health insurance, such as your employment status or the state you live in, can also cause your health insurance coverage to end prematurely.

Loss of Job or a Work Scenario Changed

Employer-based health insurance coverage generally ends the day you end work or at the end of the month you leave, whether you are fired or quit voluntarily, unless you continue coverage via COBRA.

In addition, benefits may be limited to full-time employees, so if your position changes and no longer meets the requirements for benefits, you may lose coverage. Your employer may cancel your current health benefits without offering a replacement option, which means you will also lose your related health insurance coverage.

If, instead of employer-based insurance, you have coverage through a private health plan through the Marketplace, your coverage will likely remain unchanged during a job loss. However, if you move out of state due to a job change or any other reason and wish to remain on a Marketplace health plan, you must reenroll in a new health plan that serves your new home's state to continue getting coverage for medical care.

Premiums Aren’t Paid

Your insurer may drop your coverage if you do not pay your monthly premiums on time. That said, for marketplace plans, many insurance companies offer a grace period of around three months to catch up on payments, provided you:^[1]

• Have an insurance plan through the Marketplace, with some states requiring you also receive a premium tax credit
• Paid at least one monthly premium during the benefit year

If you qualify for a grace period, you must pay back the total amount you owe or risk being dropped. Additionally, if your grace period ends without you paying any missed premiums, your insurer may retroactively cancel your coverage as of the initial missed payment month. For example, if you miss a payment in March but make your payments for both April and May, you will still need to pay March’s missed premium or risk having your coverage canceled retroactively as of March 31st.

If you’re enrolled in Original Medicare, a Medicare Advantage plan or a Medicare Supplement plan, you may also lose coverage for not paying premiums and possible late enrollment penalties. Medicare health and drug plans may offer a grace period of at least two calendar months to rectify missing payments before you can be disenrolled.^[2]

Fraud

Unsurprisingly, a health insurance company will typically drop your coverage if you intentionally misuse your insurance to commit fraud. If you intentionally put information in your application, such as lying about medical records or conditions you don’t have to receive services you don’t need, your insurer can cancel your coverage.

However, under the Affordable Care Act, if an error was made in your application due to an honest mistake, your insurance company can’t legally cancel your coverage.^[3]

In addition, using your insurance for personal gain, such as exchanging it for a bribe so someone else may receive medical services or prescriptions, also counts as fraudulent use and could result in the termination of your health plan. In cases where you are the victim of medical identity theft, your health insurance company may not be able to tell if your information was stolen or intentionally given, so ensure you contact your provider as quickly as possible to help prevent consequences to your coverage.

What Should I Do if My Health Insurance Carrier Drops Me?

If your health insurance company drops you, you can generally resume coverage by appealing their decision to cancel your coverage or switching to another health plan. Many of these options have limited windows to apply and may take some time to come into effect, so regardless of your decision, it’s a good idea to know your options in advance so you can act as quickly as possible in resuming coverage.

What Should I Do if My Workplace Drops My Health Insurance?

If your employer drops your health insurance plan, there are a few options you can take to replace it. If your employer drops your current insurance because they are changing their offerings, you may be able to enroll in a new insurance company’s health plan through them.

While most insurers won’t let you join a spouse’s health insurance outside of open enrollment, losing employer-sponsored insurance may qualify you for a special enrollment period to join your spouse’s health plan. Similarly, you may be able to get health insurance coverage through your state’s Marketplace, provided you enroll during your special enrollment period.

Can I Appeal a Health Insurance Company Cancellation?

If your healthcare provider cancels your insurance coverage, you can dispute their decision with an appeal. An appeal can occur in one of two ways:

• Internal appeal: This request is made directly to your insurer to review their decision and ensure it was made fairly, generally taking 30 to 60 days. If resuming coverage is considered urgent, where lack of medical care for that long may jeopardize your life or ability to function normally, your insurer must speed up the process to four business days or less.^[4] If your insurance company found the cancellation in error, they should reinstate your coverage.
• External appeal: Within four months of your insurer's final statement, you can request that a third party review your carrier's decision to cancel your coverage. Some states regulate the external review process, which is sometimes administered by an independent organization, while the federal government handles all other cases. Cases are decided upon within 45 days, while urgent appeals can take less than 72 hours.^[5]

In most instances, neither type of appeal will have a cost. Some external reviews may cost $25 or less if they’re through your state or an independent review organization.^[5]

How To Get Health Insurance After Being Dropped

Even if your carrier cancels your health insurance plan and if they are still selling coverage in your state, they must still offer you the opportunity to buy another plan from them that you are eligible for.^[6] In addition, if you aren’t able or willing to appeal their cancellation decision, a few options are available depending on why your insurance was dropped and your circumstances. If you lost your insurance, you can:

• Apply for a Marketplace health plan.
• Enroll in a government health plan, like Medicare or Medicaid, if you qualify.
• Join a spouse’s existing health plan, provided it isn’t limited to individuals like Medicare.
• Extend your employer-sponsored coverage under COBRA (only if you lost your job; this option is not applicable if your employer dropped your health insurance company.)

Keep in mind that depending on how you lost your coverage, you may only be able to buy a new health insurance plan from your state’s marketplace during open enrollment, which runs from November 1 to January 15 in most states.