Julie’s Got You Covered

Insurance Cancellation: What You Need to Know

• Julie Sears • Episode 16

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What Is The Process For Canceling An Insurance Policy?

Canceling your health insurance seems simple enough—until it isn't. Julie Sears pulls back the curtain on this deceptively complex process that catches many policyholders off guard.

As Julie explains, the mechanics of cancellation vary across carriers. Sometimes your agent can submit the paperwork; other times, you'll need to make that call yourself. But the real danger lurks in what happens next. Without careful planning, you could find yourself trapped in coverage limbo until the next January enrollment period.

The most alarming revelation? Contrary to popular belief, voluntarily canceling your policy doesn't automatically qualify you for a special enrollment period. Julie shares a cautionary tale of clients who canceled policies they disliked, only to discover they couldn't enroll in new coverage and were left with limited benefit plans that offer minimal protection. These situations become particularly problematic for people with ongoing medical needs or upcoming procedures.

Timing is everything when transitioning between plans. If your new employer coverage starts June 1st, your current policy should protect you through May 31st. This precision becomes even more crucial when considering dental and vision coverage, where new plans often come with waiting periods that won't cover immediate needs. And once you've passed the typical 45-60 day grace period, reinstating a canceled policy becomes nearly impossible.


Want peace of mind about your coverage decisions? Schedule your free 30-minute consultation today and let Julie help ensure your insurance transitions happen without unwelcome surprises.

To learn more about Integrity Health Insurance Advisors visit:
https://www.IntegrityHealthInsuranceAdvisors.com/
Integrity Health Insurance Advisors
469-348-4066

Speaker 1:

Welcome to Julie's Got you Covered, the podcast where Julie Sears, founder of Integrity Health Insurance Advisors, takes the fear out of finding the right health insurance. With seven plus years of experience, she's here to make finding the perfect coverage a breeze. Stay tuned for details on how you can snag a free 30-minute consultation. Tuned for details on how you can snag a free 30-minute consultation Thinking about canceling your insurance policy.

Speaker 2:

Julie walks you through the right steps to avoid unexpected coverage gaps or penalties. Welcome back everyone. I'm Sofia Yvette, co-host slash producer, back in the studio with Julie Sears, founder of Integrity Health Insurance Advisors. It's great to have you back, julie. How have you been? I've been great. How about you? I have also been great, and that is wonderful to hear. So, julie, everyone wants to know what's the process for canceling an insurance policy.

Speaker 3:

So it's going to vary by company and carrier. So sometimes with private insurance as an independent agent, I can send in those cancellations and get that taken care of for you. Sometimes it's just as easy as calling the number on the back of the card and talking to a customer service rep and getting that plan canceled. The biggest thing that I do like to preface for people is make sure that you've either got your next plan lined up or what your next steps are so that you don't have that gap in coverage, because sometimes that cancellation can be immediate or down the line Just depends on what you've got set up with that company and in that billing process.

Speaker 2:

So, julie, a little bit of a scary question here what happens if I cancel my policy outside of open enrollment?

Speaker 3:

So canceling a policy does not necessarily give you a special enrollment period to get on another plan. Some people kind of thought otherwise and gotten themselves into a jam, thinking, oh I didn't like that one, so I want to cancel and find something better. But that doesn't allow you to necessarily get on something else. Obviously, private insurance is typically available, but if, for some reason, you don't qualify based on their specific qualifications, that could leave you uninsured until that next open enrollment session.

Speaker 2:

Wow. So, julie, it sounds like there is a penalty for canceling my insurance policy. Is that correct?

Speaker 3:

There could be. You could just be left uninsured until that next window and of course, at this point in the year I know it's already May we don't know how that's happening, but that next window you wouldn't be able to get new coverage until January 1st.

Speaker 2:

Wow. So, julie, how do I time the switch between old and new coverage?

Speaker 3:

Work with an agent that you trust and we can at least walk you through what that looks like and let you know what you're possibly qualified to enroll in moving forward. So, of course, if you're starting a new job and your new coverage starts on June 1st, make sure your current policy, you know, is going to cover you through May 31st. If you have a lot of health conditions, even though you don't like your current plan, let's have a conversation and make sure that you know you're going to be properly covered so that you don't make a leap and then not have that proper coverage in place.

Speaker 2:

So, julie, are there different rules for canceling dental or vision plans?

Speaker 3:

I mean it's going to pretty much work the same. You know you just might go uninsured Obviously not the most critical with dental revision unless you know you've got some work coming up for those teeth and a new plan is going to have limitations and waiting periods, so you can't just necessarily jump into a new one thinking that they're going to cover up the bulk of those charges.

Speaker 2:

Now can I reinstate a policy after canceling it?

Speaker 3:

That's going to be based on company policy. So and it's going to depend on what timeframe Most of them will give you a little bit of leeway to come back and change your mind. But after a certain period of time 45, 60 days there's no going back. That cancellation is going to be enforced and you'd have to re-enroll. Of course you can't just re-enroll in an ACA plan for those Affordable Care Act plans, and on private, they're going to look at your claims history to determine whether or not you're going to be a risk factor for them to re-enroll you.

Speaker 2:

Now, how does canceling affect dependent coverage?

Speaker 3:

That's where it can get a little more leeway. So you know an adult dependent that could give them a qualifying reason because you didn't choose to cancel that coverage. Your parents canceled your coverage and you can go and get enrolled in something but it's still you're not necessarily having a. You know you may not qualify because it's going to just be based on the questionnaire from the, the ACA qualifications, to see whether you do qualify for that enrollment period. Same with private. Most private don't do minor dependents, so if they're under 18, you may not be able to get them on a private plan over 18. Again, you just have those specific qualifications for whatever company you're looking at.

Speaker 2:

So, Julie, do you have any examples of a time when this happened to a client of yours?

Speaker 3:

Unfortunately, yeah, we've had, where you know, someone missed a payment or you know, thought they would cancel for a little bit, and unfortunately something has come up and they now needed coverage. But they no longer qualify for a private plan and you don't have an ACA option because you don't have a special enrollment period, and so at that point you are left with a limited benefit plan, which is just that they're going to pay limited benefits and that's what you're going to have. It pays what it pays. It doesn't necessarily pay bad, but it doesn't limit your potential out of pocket.

Speaker 2:

Any final words today for our listeners on the process for canceling an insurance policy.

Speaker 3:

You know just find a trusted advisor to just bounce it off of and make sure you've got, you know, all the I's dotted and T's crossed appropriately so that you don't have a gap, just in case, because that's what it's for.

Speaker 2:

Well, thank you for your insight into this, Julie. We'll catch you on the next episode. Have a fantastic rest of your day.

Speaker 1:

You too fantastic rest of your day you too. Thanks for tuning in to. Julie's got you covered. Ready to say goodbye to insurance stress? Head to integrityhealthinsuranceadvisorscom or call 469-348-4066. That's 469-348-4066 to book your free 30-minute consultation With Julie. Health insurance doesn't have to be scary. She's got you covered.