A qualifying event (also called qualifying life event) is considered to be any change in your life, such as getting married or divorced, birth or adoption of a child, moving to another area, or you have lost other coverage that allows you to make changes in the health insurance you are already enrolled in.
However, you can drop your health insurance without a qualifying life event at any time. But, before doing so, you must remember one thing: once you have canceled your insurance plan, you will not get enrolled again until it’s time for the next open enrollment period.
Before planning to drop an insurance plan, you must make sure which insurance coverage you are enrolled in. Here, we will try to answer your questions regarding canceling your health insurance.
Dropping off employer-sponsored health policy
Many companies offer health insurance coverage to their employees. However, it’s not possible to drop employer-sponsored health insurance at any time without a qualifying event. If you want to cancel the policy, then you must have a qualifying event.
Dropping off private health plans
To drop off the private health insurance policy, you must check your policy’s terms of cancellation so that you can understand the steps that should be taken.
After gathering the information, follow the steps to cancel the policy that the insurance representative guides you.
Sometimes You may be required to mail or fax a confirmation letter confirming the cancellation. Ensure to find out about refunds or any pre-payments, as many insurance companies offer you a refund.
Is there a penalty for canceling the health insurance plan?
You must be aware of any penalties or fees you might have before trying to cancel an insurance policy. There might be some hidden penalties that must be taken care of. That is why most people, instead of dropping the insurance policy, immediately prefer to wait until the insurance renewal date.
When an employee tries to cancel the policy without replacing it with another plan, consequences occur in the form of a fine; while filing the income taxes, a fine must be paid.
Is it possible to cancel my health insurance policy and still get a refund?
Yes, you can get a refund after canceling your health insurance. But, if you have made any claim in the policy during that year, you will not get a refund.
You have to write to the insurance company that you want to cancel the insurance policy, and after deducting the stamp duty charges and other risk charges, you will get the refund.
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Can I use Short Term Insurance?
The old policy should not be dropped until you have a new policy. Make sure that the new policy provides you the exact coverage you need by reviewing it.
In some cases, where people drop off old policies without waiting for the new health plan, a short-term health plan is considered. It acts as temporary health insurance coverage.
It does not provide essential health benefits and offers a limited selection of doctors; however, it provides coverage for unexpected illnesses and accidents. Moreover, you can enroll in this plan at any time of the year.
Consequences of canceling a health plan
Many people decide to cancel their health care plan without being aware of the consequences of not being insured.
These can be facing financial burdens, paying a tax penalty, or health consequences.