There are a number of reasons why you’d want to cancel your health insurance plan. Maybe you started a new job and are now eligible for coverage through your new employer. Perhaps you recently turned 65 and qualify for Medicare. Or, maybe you can no longer afford healthcare coverage in the wake of soaring premium costs.
The steps you take to cancel health insurance will depend on the particular protocols of your provider, your reasons for dropping coverage, and whether or not you have dependents covered under your plan. Plus, if you cancel health insurance coverage and don’t replace it, you may be fined with a tax penalty for the months you went without coverage.
Outlined below are some guidelines to help you navigate how to cancel unaffordable health insurance coverage, as well as a few tips that can help you make smart decisions about canceling or changing your healthcare coverage.
How to Cancel Health Insurance from the Marketplace
- Online: If you’re dropping coverage you purchased on a government marketplace, such as Healthcare.gov or your state marketplace, you can cancel your health insurance policy by logging into your marketplace account. The exact prompts and page flows vary among state marketplaces. Those who bought plans on the federal exchange should log into their account on healthcare.gov, navigate to the “My Plans & Programs” tab, then select the menu option to “End (Terminate) All Coverage.” Then, Marketplace health insurance policyholders can enter the date when they would like their coverage to end before following the final instructions to cancel their policy.
- By Phone: If you prefer to cancel your Marketplace health insurance plan over the phone, call the government ACA help center at 1-800-318-2596. Follow any recorded prompts; once you are connected to a representative, you will provide him or her with information to confirm your identity. Then, the Marketplace representative can help you cancel your plan over the phone. Canceling coverage by phone may be an easier option for people who are unable to operate a computer, or for those who would like assistance in switching to a government-run healthcare program.
Tips: Cancelling Marketplace Plans
- Cancel ASAP: Once you’ve decided to cancel your Marketplace health insurance plan, do so ASAP. There is typically a 14-day waiting period for canceling coverage and policyholders are responsible for premium payments they owe during that two-week duration. One exception to this occurs when you’re canceling coverage for dependents or your spouse. In that case, the cancellation of coverage may take effect immediately.
- Set End Date Ahead of Time: Policyholders are permitted to cancel Marketplace insurance proactively, so you can also let your insurance provider know if you want your coverage to end at a specific date in the future.
- Time It Around Open Enrollment: You can cancel your health insurance plan at any time, but if you cancel your policy outside of open enrollment and before securing new coverage, you won’t be able to enroll in a new healthcare plan until the next open enrollment period rolls around.
- Make Sure You’re Not Billed Once You Cancel: Follow up, check your bank statements. Make sure you’re not billed for your cancelled policy and check to make sure that your new coverage is active.
How to Cancel Health Insurance from a Plan Purchased Through a Private Insurer
- Contact Your Provider: If you want to cancel health insurance bought through a private insurer, you’ll need to contact your health insurance provider to notify them of your decision to drop your coverage.
- Steps to Take: Different insurance carriers have different cancellation processes. Some insurers may send you a form to fill out; others may want written confirmation of your decision to end coverage. Call the customer services number listed on the back of your health insurance card to find out which action(s) you need to take to cancel your plan.
Tips: Cancelling Private Plans
- Get Carded: Your insurer’s phone number should be printed on your policy, your health insurance card, and any premium bills received by mail.
- Watch Out for Waiting Periods: If you’re getting coverage through a new employer, remember that many workplaces require a 30- or 90-day waiting period before allowing your new coverage to take effect. To avoid a lapse in coverage, double check with your HR department to confirm when your new coverage will take effect.
- Write Down Confirmation Numbers: When you speak with an insurance representative, record the representative’s name and your cancellation confirmation number. It will be much easier to resolve any problems or issue that arise if you have this documentation on hand.
How to Cancel Health Insurance from Employer-Sponsored Health Insurance Plan
- Contact HR: If you want to cancel your health insurance coverage which you get through your employer, speak to the person at your workplace who handles employee benefits.
- Scheduling Matters: Make sure that the cancellation date for your existing coverage is on or after the date when your new coverage is scheduled to take effect.
- Exceptions for “Cafeteria Plans”: An employee can voluntarily cancel their employer-sponsored health insurance at any time, provided the employer doesn’t have employees’ premium contributions deducted pre-tax. If employees’ premium payments are made with pre-tax dollars, it means they are enrolled in a Section 125 Plan and cannot change or cancel their insurance coverage, unless it is Open Enrollment or they experience a Qualifying Life Event (QLE).
Tips: Cancelling Employer-Sponsored Group Plans
- COBRA: Employees (and their dependents) who lose group coverage must be offered the opportunity to continue their medical coverage at their own expense.
- If You Have Questions/Concerns: If you want to cancel your health insurance plan, talk to the HR department at your workplace.
How to Cancel Medicaid or CHIP Programs
- Income Adjustment: If you are no longer eligible for Medicaid or CHIP coverage due to a change in your household income, you can expect to be notified by your state. If you lose your Medicaid or CHIP coverage you will have a 60-day special enrollment window during which you can switch to a Marketplace plan.
- Notify Your Caseworker: If you elect voluntarily to cancel your Medicaid or CHIP plan, the process for canceling coverage varies from state to state. Typically, you’ll call your state Medicaid department to notify your caseworker. Keep in mind that canceling Medicaid or CHIP coverage does not trigger a special enrollment period. For cases when someone loses coverage because they are no longer eligible for CHIP or Medicaid, they have up to 30 days to enroll in a Marketplace plan before losing Medicaid or CHIP coverage.
Tips: Cancelling Medicaid or CHIP
- If Your Plans Change: As long as you still meet eligibility requirements, you re-enroll in Medicaid or CHIP at any time of year.
- Call Your State Medicaid Department: The exact process for canceling Medicaid or CHIP coverage differs from state to state, but your first step is to call your state’s Medicaid department. Get in touch with your caseworker and notify them of your decision to cancel coverage.
How to Cancel Obamacare and Switch to Medicaid or CHIP
- Expect a Letter: You’ll follow a slightly different process to end your Marketplace coverage if you’re cancelling your Obamacare plan because you’ve become eligible for Medicaid or CHIP (Children’s Health Insurance Program). You can expect to receive a notification letter informing you of your eligibility for Medicaid or CHIP, along with a list of actions you need to take by a certain date.
- Don’t Forget: If you’ve become eligible for Medicaid or CHIP and you fail to cancel your Obamacare plan once your Medicaid coverage starts, your Marketplace coverage will continue, but your financial assistance will end (meaning you’ll pay the full cost associated with your Marketplace health insurance, minus any cost-sharing reductions you have may been receiving).
Tips: Switching from Obamacare to Medicaid
- Cheat Sheet: This document provides detailed instructions on how to cancel your Marketplace coverage in order to switch over to Medicaid or CHIP, outlining the cancellation process for policyholders in a range of situations.
How to Cancel Your Health Insurance: Switching from Obamacare to Medicare
- On Your 65th Birthday: If you have a Marketplace plan, you can keep it until your Medicare coverage starts.
- Initial Enrollment Period (IEP): Once you’re eligible for Medicare, you’ll have an Initial Enrollment Period to sign up for coverage. For most people, the Initial Enrollment Period starts 3 months before their 65th birthday and ends 3 months after their 65th birthday.
How to Cancel Health Insurance on Behalf of a Deceased Person
- To Cancel Medicare: To report the death of a person receiving Medicare benefits, make sure you have the person’s Social Security Number. Call Social Security at 1-800-772-1213 (TTY: 1-800-325-0778) to report the death.
- To Cancel a Marketplace Health Insurance Plan (if you are a dependent or spouse covered under the deceased person’s policy): If you’re the main policyholder and someone on your plan dies, you can cancel health insurance for the deceased enrollee online. You can then contact the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) to report the date of the person’s death.
- To Cancel a Marketplace Health Insurance Plan (if you aren’t included on the deceased person’s policy): If you need to cancel health insurance for someone who’s died and you aren’t a member of the household on their Marketplace application, you can still report the death of the enrollee, so long as you’re at least 18 years old. Here’s what you’ll need to do:
- Submit copies of documents verifying the death: death certificate, obituary, court document providing proof of death, or proof that somebody has been named executor of the estate.
- These documents should include: the deceased person’s full name, date of birth, SSN (if known), and the contact information of the person submitting this documentation.
- Mail copies of all documents to: Health Insurance Marketplace / ATTN: Coverage Removal, Dept. of Health and Human Services, 465 Industrial Blvd, London, KY 40750-0001
- Marketplace Call Center Will Contact You: The Marketplace Call Center will try to contact you about ending coverage for the deceased, and will inquire about re-enrolling anyone else still on the plan. The remaining household members may need to update their tax filing, financial, or other information on their application. These changes usually qualify them for a Special Enrollment Period (SEP), so they will be able to change plans outside the annual Open Enrollment Period.
Exceptional Cases for Cancelling Health Insurance
- Child Support or Divorce: Generally, anyone can cancel their health insurance coverage at any point in time. Of course, you might be legally obligated to maintain your health insurance policy as part of court-ordered child support or divorce proceedings.
- When You Cancel Medicare and Want to Switch to Private Coverage: Another exception to this rule is when someone covered by Medicare has chosen to obtain private insurance. When this happens, the Medicare beneficiary must apply to the Healthcare Financing Administration (HCFA) before changing insurers or plans.
Taking the Next Steps
If you’re unhappy with your current coverage or you somehow lose coverage, the first thing to do is not to worry; usually, there are other options available for you out there.
For More Reading:
- A Step-By-Step Guide to Buying Individual Health Insurance
- How to Choose Between Major Medical Insurance and a High-Deductible Health Plan
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