Health Insurance Cancellation Laws

Can your health insurance drop you without notice?

A worried person with a broken foot reads a letter.
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AntonioGuillem / Getty Images


Getting word that your health insurance company is dropping your coverage can be shocking, to say the least. If the news comes in the middle of your policy term, it can be even more surprising. Thousands of people get these notices every year, sometimes due to changes in federal or state laws.

However, insurers can’t cancel your coverage anytime for just any reason. There are laws in place to protect you from frivolous cancellations. Learn more about the current health insurance cancellation laws and what to do if you lose coverage.

Key Takeaways

  • Your health insurance coverage can be canceled on your coverage anniversary date if your contract has cancellation provisions.
  • You can lose coverage midterm if you don’t pay your premiums or if the insurer discovers you intentionally lied on your application.
  • Insurers must provide you with adequate advance written notice of cancellations.
  • If you disagree with the cancellation decision, you can file an internal or external appeal.
  • Upon losing coverage, you can sign up for another health plan.

When Your Health Insurance Company Can Cancel Your Policy

Your health insurance company can’t just cancel your coverage on a whim. Here’s a closer look at how insurance cancellation laws work.

Anniversary Cancellations

In most cases, individual health insurance policies have a 12-month term with a guaranteed auto-renewal option. However, if your policy has cancellation provisions, your insurer can cancel your coverage on your anniversary date—as long as the required notice is given. The required-notice time frame for cancellations can vary by state but typically ranges from 60 to 90 days.

Midterm Cancellations

In addition to anniversary cancellations, certain circumstances can trigger midterm cancellations. In these cases, your coverage can be canceled before your policy’s renewal or expiration date. You may receive a midterm cancellation notice if you: 

  • Intentionally put false or incomplete information on your application and it’s discovered
  • Don’t pay your premiums within the allowed grace period 

If an insurer wants to cancel your coverage midterm, it must provide you with written notice at least 30 days before you’ll lose coverage.

Note

Some states amend the notice regulations, which can result in shorter or longer notification periods. For example, Wisconsin allows insurers to cancel new policies in the first 59 days of coverage by giving 10 days’ written notice.

Your Rights When Your Policy Is Canceled

If your insurer decides to cancel your health insurance coverage, it must give you advance notice that adheres to your state’s laws. You also have a right to know why the coverage is being canceled and how to appeal the decision. Further, you have a right to get new health insurance coverage that meets your needs.

Note

The law prevents insurers from canceling health insurance for frivolous reasons. For example, it’s illegal for an insurer to cancel your health care coverage if you or your employer made an honest mistake on your application, or if you left out information that has little bearing on your health.

If you disagree with your insurer’s decision to cancel your coverage or think it’s illegal, you have the right to appeal it.

Filing an Appeal

When you want to appeal an insurer’s decision to cancel your health insurance coverage, you have two options.

  1. Internal appeal: Contact your insurance company and request it conduct a full and fair review of the cancellation decision. If you are in an urgent situation that requires a timely review, the company must speed up the process for you.

  2. External appeal: You can apply for an external review by an independent third party in certain situations. The external review process requires that you file the request within four months of the date you received the written notice of cancellation. Standard external reviews can take up to 45 days, while expedited reviews are settled within 72 hours, depending on the medical urgency of the request.

    To be eligible for external review, your case should involve being denied due to one of the following reasons:

    • You or your health care provider disagree with the insurance company about a medical judgment.
    • Your health care plan determines that a treatment is experimental or investigational.
    • The insurer claims that you gave false or incomplete information when applying for coverage.

    Note

    All insurance companies must offer an external review process that complies with federal consumer protection standards.

If you need help with the appeal process, you can check if your state has a Consumer Assistance Program (CAP). You can also reach out to your state insurance regulator for answers.

Health Insurance Options After Cancellation

When you’re unable to successfully appeal your health insurance cancellation or choose not to, you don’t have to go ahead without coverage. You can shop for a new plan that best suits your needs, which may be provided by:

  • Your current health insurance company
  • A company inside the Marketplace
  • A company outside the Marketplace
  • Your employer
  • Medicare
  • The VA
  • TRICARE

Note

Was your health insurance plan canceled outside of the open enrollment period? You may qualify for a special enrollment period, which would give you 60 days to enroll in a new Marketplace plan.

If you need help figuring out your health insurance options after a cancellation, you can call the Marketplace call center at 1-800-318-2596 or head to the Healthcare.gov website. It can also be helpful to start your search with plans from top-ranking health insurance companies.

Frequently Asked Questions (FAQs)

Do current health insurance cancellation laws protect all plans?

Yes, the current health insurance cancellation laws protect all health plans, both employer-sponsored and independent, and include older plans grandfathered into current laws.

How and when will I be notified if my health insurance policy is being canceled?

If your health insurance policy is being canceled, your insurance company is required to provide you with written notice. The amount of notice an insurer is required to give can vary by state and cancellation type but generally ranges from 30 to 90 days.

What should I do after I get a cancellation notice on my health insurance policy?

Once you’ve received a cancellation notice on your health insurance policy, review it carefully to determine if you want to appeal it or not. If you decide to appeal it, you can reach out for support from your state’s Consumer Assistance Program (if it has one) or your state insurance regulator. Alternatively, you can follow the dispute instructions from your insurer. If you agree with the cancellation, you can begin the search for a new health insurance plan.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Health Insurance Marketplace. “What To Know About Insurance Coverage Cancellation.” Page 1.

  2. HealthCare.gov. “Cracking Down on Frivolous Cancellations.”

  3. Wisconsin Office of the Commissioner of Insurance. “Insurance Terminations, Denials, and Cancelations.” Page 1.

  4. HHS.gov. “Cancellations & Appeals.”

  5. HealthCare.gov. “External Review.”

  6. Health Insurance Marketplace. “What To Know About Insurance Coverage Cancellation.” Page 3.

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