COMMON QUESTIONS – HOW AND WHEN CAN YOU CANCEL YOUR CALIFORNIA INDIVIDUAL PLAN
An estimated 20-30% of our California health insurance quotes run through the site is for temporary health insurance.
There are a few reasons that people are looking for short term but they usually don’t entirely understand the benefits and disadvantages of short term coverage.
Of course, the primary reason is that they will only need coverage for a short period of time…usually under 6 months but the standard plans can be cancelled month to month anyway so this isn’t a valid reason considering the draw backs of short term (will eventually time out).
This brings up a good question…what are the contracts requirements for “permanent plans” and how and when can you cancel them?
Let’s take a look.
Typical California Health Plan Contract
So what health insurance contract length is required?
We have good news for you.
Unlike many other types of insurance, the California health plan contracts are month to month.
You are able to cancel your health policy month to month for any reason at all.
These policies are guaranteed renewable which means that you continue the policy until you turn age 65 (which is when Medicare kicks in).
The only reason a policy can be cancelled is due to non-payment and under certain situations where fraud was committed during the underwriting process.
There is no longer medical underwriting since Jan 2014 with Obamacare
You must also meet general eligibility requirements such as residency.
After the 10 day free look window from the carriers notification of their offer to you, the contract will then be month to month even if you pay multiple months at a time.
We can request a refund for pre-paid out months beyond the cancellation date. You are not locked into a longer period of time than the next month.
You can quote Covered Ca plans and off-exchange options here:
Let’s look at how you would cancel the policy
How And When To Cancel A California Health Plan
The California health insurance policy is pre-pay in design.
You are billed monthly (are quarterly depending on what you opted for) for the next period of time.
For example, you will receive a bill in May to pay for June (usually June 1st to last date of June).
The period of coverage unit is always monthly.
You will also have a 30 day grace period to make your payment but try not to rely on this as non-payment is primary reason people lose their coverage and if you have health issues, it can difficult or impossible to re-qualify until Open Enrollment (typically Nov 1st – Jan 31st) when coverage is guaranteed issue.
One note…Cobra payments are different in that they are very strict about payment.
Don’t count on any 30 day grace period with Cobra and make sure to submit your payment in required period. What about the first month of premium?
You need to submit payment up front with the application.
You have a 10 day window from when the carrier notifies you of their offer to cancel the policy never effective for a full refund. After that window, the policy is functionally month to month even if you pay quarterly in advance.
Worst case, you’re only on the hook for one month’s premium if you wish to cancel beyond the 10 day window and some carriers will be flexible even then.
Written Request To Cancel Coverage
We just need your written request to cancel a policy any time prior to the 1st of the month that you want it cancelled on.
For example, if you want to cancel a policy January 1st, just email us the request any time during December with your ID# and requested cancellation date (we won’t assume it’s the 1st since this is a critical issue).
We’ll get that taken care of for you. You can cancel for any reason so we only need the request.
If you pre-paid a longer period of time, the carrier will send a refund for the additional months paid.
The cancellation date can only be the 1st of a given month.
We cannot request mid-month dates although that’s rarely an issue since any other California health plan will generally have an effective date of the 1st as well.
Popular Related Pages:
1st Payment for California health applications
New Rules for Effective Dates under Covered California
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