Can you cancel your employer health insurance at any time

Your health insurance rights depend on how big your employer is. Under the Affordable Care Act, large employers are obliged to provide health insurance to employees. If your employer is a small business, it has the freedom to cancel your health insurance. The law is murky on whether you are entitled to a warning in advance.

ACA Requirements

The ACA was implemented to reduce the number of uninsured Americans. One of the rules is that "applicable large employers" must provide group insurance to full-time workers. Defining an ALE gets complicated but the rule of thumb is that companies qualify if they have 50 full-time employees. Yanking your insurance away, with or without telling you, violates the law. Smaller companies are not obliged to provide you with insurance unless it's in your contract or union agreement.

The ACA counts you as full-time if you average more than 30-hours-per-week at your job. If your average hours are less, the law does not require your employer to provide insurance. The company is free to cancel any coverage it does provide. If you are full-time it can cut your hours until you no longer qualify.

ERISA

One of the many federal laws covering worker benefits, the Employee Retirement Income Security Act says your employer must notify you about any major changes to the plan, such as an upcoming cut in benefits. Surprisingly, some courts have held that canceling the plan outright is not a modification, so the company does not have to notify anyone. Still, many companies and business organizations recommend notifying employees to stay on the safe side of the law.

State Law

Federal law is not the only game in town. Some states have added laws on coverage and notifying employees if there is a material change in your benefits. Your state department of labor or the insurance commissioner's department should be able to tell you the law.

If You Lose Coverage

If you discover your employer has covertly stopped your health insurance, contact your boss or human resources and ask why. It might be they have a valid reason but made a mistake in the notification process. Suppose your health benefits covered your unemployed spouse, who is now back at work. Many companies will not cover a spouse who can take out insurance through her own employer.

If the company does not have a valid reason, you may have grounds for a lawsuit. To sue someone under ERISA you must take administrative steps first, such as filing a complaint with the federal Department of Labor. If you exhaust that process without getting justice, then you can turn to the courts.

You may need to end your Marketplace plan if you get other health coverage, or for another reason.

IMPORTANT: Don't end your Marketplace plan until you know for sure when your new coverage starts. Once you end Marketplace coverage, you can’t re-enroll until the next annual Open Enrollment Period (unless you qualify for a Special Enrollment Period).

• If you’re ending coverage for everyone on the application, your termination can take effect as soon as the day you cancel, or you can set the Marketplace coverage end date to a day in the future — like if you know your new coverage will start on the first day of the following month.

• If you’re ending coverage for just some people on the application, in most cases their coverage will end immediately. In some cases, coverage will not end immediately, including when the household members who remain enrolled in coverage qualify for a Special Enrollment Period. The best way to make sure coverage ends on the right date is to contact the Marketplace Call Center and request the change.

When and how to end your Marketplace plan depends on your situation. Select the reason you’re ending coverage below for step-by-step instructions.

1. How do I cancel health insurance coverage? How might this impact me if I later want to re-enroll?

If you are a retiree, you may cancel at anytime. You must provide written, signed notification of cancellation to ETF.

An employee’s voluntary cancellation (or switching from family to individual coverage which is deemed voluntary cancellation for all insured dependents) requires written, signed notification to the employer denoting a cancellation of coverage. If your premiums are being deducted on a pre-tax basis under Internal Revenue Code Section 125, you may cancel coverage only if:

• You experience a qualifying change or life event and submit an application to cancel coverage within 30 days of the event;
• You terminate employment;
• You become eligible for and enroll in another group health insurance plan; or
• You cancel your coverage during the annual open enrollment period.

If your adult dependent child becomes eligible for and enrolled in other group health insurance coverage, and you want to drop coverage for him/her, you must submit an application electronically or via paper to your employer (to ETF for retirees) within 30 days of the effective date of other coverage. In addition, you must submit proof of enrollment such as an ID card from that coverage. If this is your last dependent and you want to change to individual coverage, you must note that on your application.

If your spouse becomes eligible for and enrolled in other group health insurance coverage and you want to change to individual coverage or cancel your family coverage, you must submit an application electronically or via paper to your employer (to ETF for retirees) within 30 days of the effective date of other coverage. In addition, you must submit proof of enrollment such as an ID card that lists all individuals covered under that plan. (Retirees, please see the first paragraph in this Frequently Asked Question for important information.)

If your health insurance premiums are being deducted post-tax, you may cancel at anytime.

Be aware that voluntary cancellation of coverage does not provide an opportunity to continue coverage for previously covered dependents as described in the Continuation of Health Coverage section. Cancellation affects both medical and prescription drug coverage.

No refunds are made for premiums paid in advance unless your employer (or ETF if you are no longer an employee of a participating local employer) receives your written, signed request on or before the last day of the month preceding the month for which you request the refund. Under no circumstances are partial month's premiums refunded. Once coverage terminates, you will be responsible for any claims inadvertently paid beyond your coverage effective dates.

2. When can my health insurance coverage be terminated?

Your coverage can only be terminated because:

• Premiums are not paid by the due date. Coverage is also waived (known as "constructive waiver") when the employee portion of the premium is not deducted for 12 consecutive months.
• Coverage is voluntarily canceled.
• Eligibility for coverage ceases (for example, termination of employment).
• Death of the subscriber.
• Fraud is committed in obtaining benefits or there is an inability to establish a physician/patient relationship. Termination of coverage for this second reason requires Group Insurance Board approval.
• Your employer (for retirees, former employer) withdraws from the Wisconsin Public Employers Group Health Insurance Program.

Retirees only: Your coverage can be terminated because you:

• Became ineligible for coverage as a retiree because of becoming an active Wisconsin Retirement System employee. (See Question: How are my health benefits affected by my return to work for an employer who is under the WRS?)
• IYC Medicare Advantage enrollees only: Dropped Medicare Part B. Your coverage will change to IYC Medicare Plus. You may also change health plans.

The Medicare enrollment requirement is deferred while you or your spouse are employed and covered under a group health insurance plan from that employment. (See Question: When must I apply for Medicare? Active employees should contact their benefits/payroll/personnel office, retirees should contact ETF for the date coverage will end.

3. What if my employer's participation ends under the Wisconsin Public Employers Group Health Insurance Program?

When your employer's participation ends in this program, coverage will cease for all participants. This includes retirees, survivors and those who have continuation coverage. If the employer obtains group health insurance from another carrier, ask the employer if the new carrier will provide coverage for retirees, survivors and continuants.

When the employer terminates participation, you will not be eligible for continuation of health coverage.

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