According to the World Health Organization (WHO), the U.S. and Canada are ranked high in terms of the quality of healthcare provision to citizens. Despite this, healthcare costs in the U.S. are among the highest in the world. On the other hand, Canada has a single-payer healthcare system, making it more affordable to its citizens. Nonetheless, there are several exclusions to this system.
From a quality health standpoint, there are advantages to having some form of insurance. Health insurance is a vital aspect of most people’s lives because it provides financial protection as well as peace of mind if a health emergency occurs. However, whether it’s due to an employment change, a change in financial circumstances, or a move to a new city, state or province, certain circumstances may compel you to cancel or change it midway. What are the qualifying reasons for cancelling health insurance? Keep reading to find out.
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Losing An Employment Sponsored Coverage
Losing an employment-sponsored insurance policy can occur when you stop working or your employer stops offering health insurance benefits. In the U.S., such an occurrence automatically triggers two options for the insured:
- The first is the special enrollment period, whereby you can take out health insurance coverage for the remaining months via a public-run exchange such as the Affordable Care Act (ACA) marketplace. But, to be eligible, you must enroll within 60 days of losing your job-based coverage.
- The second option is to enroll for Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage, whereby you can continue with your employer-based coverage for a limited period, usually eighteen months. However, you must pay the full premium, including an administrative fee.
Employer-based health insurance plans are group health plans and are typically more comprehensive. They are similar to those offered by universities to their students. Universities may often require individuals to terminate the policy by filling out a form before graduation.
In Canada, health benefits may continue for a limited duration after your job ends. However, the timeframe’s length depends on your province’s regulations, the terms of your job, and the length of service. It’s important to check with your provincial legislation and employer guidelines regarding continuing health benefits after leaving employment.
After leaving your job, you may join individual or family-based policies offered by private insurers such as Manulife, Greenshield, and GMS Medical Insurance. These policies may cover services not covered by the public healthcare system, such as vision care, prescription drugs, and dental care. However, the premiums may be higher, so carefully reviewing the options by shopping around before purchasing is essential.
Becoming Eligible For Government-based Plans in the United States
Becoming eligible for government-based plans such as Medicare or Medicaid in the United States can trigger a loss of private health insurance coverage. For example, if you become eligible for Medicaid based on income, you may cancel your private health insurance plan because Medicaid typically becomes the primary payer. Medicaid eligibility depends on a household’s current monthly income. Upon enrollment, the majority of enrollees have up to 12 months before renewing their plan.
The same applies to Medicare, which covers individuals aged 65 years and above or those with certain disabilities. If you have Medicare Part A and decide to keep your Marketplace plan, you may lose your premium tax credits advantages or any cost savings from your private insurer. In some situations, individuals may have to give up their privacy policies to enroll through the ACA marketplace because it’s more affordable, depending on your current income.
Change In Family Status
A change in family status, such as marriage or divorce, can affect your private health insurance coverage and lead to cancellation. If you get married, you may enroll in your spouse’s job-sponsored coverage and subsequently cancel your coverage.
Similarly, if you get divorced, you could lose coverage under your former spouse’s health coverage and may have to sign up for another insurance. You may choose to continue using your spouse’s health coverage during the divorce proceedings. Once the divorce is finalized, the coverage ends; however, you can continue with your ex-spouse’s coverage for up to three years while paying the full premium. Such a scenario is possible through COBRA. If you have kids, they will continue with the same policy they had during the marriage period.
A divorce is a qualifying event for special enrolment; therefore, you can join a new policy outside the normal timeframe. Usually, open marketplace enrollment starts from November 1 to December 15 every year in the United States. It’s essential to be aware of any potential change to your coverage and research your options to prevent a gap in your coverage.
Tips Before Cancelling Health Insurance
Before cancelling your health insurance, there are several things to keep in mind:
- First, you need to know the implications of cancelling your coverage. For instance, if you cancel outside the special enrollment period, you may not get coverage until the next open enrollment period.
- Secondly, you should consider current medical needs and whether your new policy will cover the expenses. If you have ongoing treatment, be sure to have sufficient coverage before cancelling the policy. Health insurance is vital, and if you’re south of the border, you can shop for how to get temporary health insurance and choose the most suitable option when changing jobs. Canadians can connect with companies like Alliance Income for similar results.
- Thirdly, understand your alternatives, such as the medical expenses without health coverage and other options, such as the Children’s Health Insurance Program(CHIP) and Medicaid.
- Lastly, keep in mind that cancelling a policy that’s available through the ACA marketplace and you have no other option, or your income falls below a certain threshold can attract a penalty for lacking insurance.
In Canada, individuals have the right to cancel their insurance policy within a specified period. But, you may have to pay a penalty if the cancellation occurs before the expiry date.
Contact your insurance company and check your policy for the next steps to follow. Additionally, when moving from one province to another, you may need to cancel your province’s health care insurance plan by submitting a cancellation form.
Before You Cancel Your Health Insurance, Make Sure You’re Covered
As noted, there are several reasons for cancelling your health insurance in the U.S. and Canada. But, it’s vital to consider the implications, alternatives, and possible penalties. Speak to a health insurance professional or provider before cancelling your policy to understand the potential consequences and options available fully.
For the last ten years, the insurance professionals at Group Enroll have been providing businesses and individuals alike with insurance products that not only cover required services and medications, but ones that provide access to preventative ones such as massage, chiropractors and mental health professionals. Let our professionals help you secure an insurance policy for you, your family or your business. Fill out our quick form and one of our experts will get back to you promptly. Prefer to speak to an agent right now? We can do that too. 1-877-600-5666