Navigating Insurance Policies: Understanding When Change Is Necessary

There are many reasons why you may need to change your insurance. For example, if you're moving to a new area, getting married, having a baby, or changing jobs. These are known as qualifying life events, and they allow you to add or subtract people from your plan or change the plan itself. You can also change your insurance during the annual Open Enrollment Period, which typically runs from November 1 to December 15 or January 15. During this time, you can accept your current plan's renewal or shop around for a better option.

Cancelling your current insurance plan

Understand the Reasons and Timing:

Before initiating the cancellation, it is essential to understand the reasons behind your decision. Are you dissatisfied with your current coverage? Have your personal circumstances changed, such as getting married, having a baby, or moving to a new area? These life events often trigger a review of insurance policies. Additionally, you may want to cancel if you have found a better plan or no longer require the coverage.

It is also crucial to consider the timing of your cancellation. In most cases, insurance plans can be cancelled at any time. However, certain types of insurance, such as employer-provided health insurance, can only be cancelled during specific periods, like open enrollment or if you experience a qualifying life event. Open enrollment usually occurs annually, typically from November 1 to January 15, but these dates may vary depending on your state and insurance provider.

Contact Your Insurance Provider:

Reach out to your insurance company to inform them of your intention to cancel. You can find their contact information on your policy, insurance card, or premium bills. They will guide you through their specific cancellation protocols and procedures. Some insurers may allow you to cancel over the phone, while others may require additional steps, such as submitting a confirmation letter via fax or mail.

Understand the Impact on Coverage:

Cancelling your insurance plan can result in a gap in coverage. Ensure that you have alternative coverage in place before cancelling your current plan. This is crucial to avoid a lapse in protection, especially if you frequently require medical care or have ongoing treatments.

Follow the Necessary Steps:

Once you have confirmed the cancellation process with your insurance provider, follow their instructions carefully. This may involve completing and submitting specific forms or documents. Make sure to take note of important dates, such as the effective date of the cancellation, to ensure a smooth transition.

Explore Refund Options:

If you have paid for your insurance coverage in advance, enquire about a premium refund for the remaining period. Many insurance companies will reimburse you for the unused portion of your policy.

Finalize the Cancellation:

After completing all the necessary steps and submitting any required documentation, confirm the cancellation with your insurance provider. Make sure to obtain confirmation of the cancellation and verify that your coverage has ended as intended.

Remember, while you can typically cancel your insurance plan at any time, enrolling in a new plan may be restricted to specific periods, such as open enrollment or special enrollment periods triggered by qualifying life events. Therefore, it is essential to carefully consider the timing of your cancellation and ensure that you have alternative coverage in place to avoid any gaps in protection.

Switching to a new insurance provider

• Shop around for better rates: Compare quotes from multiple insurance providers to find the best rates, coverage options, and discounts that suit your needs. Consider using a quote comparison tool to make the process easier.
• Contact your current insurance company: Before making the switch, get in touch with your current provider to see if they can match the quote you received from another company. Ask about their cancellation process and any potential penalties for ending your policy early.
• Purchase the new policy: Ensure that your new policy starts at least one day before your current coverage ends to avoid a lapse in coverage, which could result in higher future rates or legal troubles.
• Cancel your previous insurance: Once your new policy is in place, initiate the cancellation process for your old policy. Be aware of any open claims, as your previous insurer will still be responsible for handling those.
• Get proof of insurance: Obtain your new insurance ID card or download the insurance provider's app to access it. Most states accept digital ID cards if you're pulled over.
• Inform your lender: If you have a loan or lease on your vehicle, notify your lender about the change in insurance coverage. This step is crucial to ensure they have the updated details of your new policy.

It's important to note that you can switch insurance providers at any time. However, waiting until your current policy's renewal date may be advisable to avoid mid-term cancellation penalties. Additionally, some providers offer loyalty discounts for long-term customers, so switching too frequently could result in losing access to such benefits.

Qualifying life events that allow you to change your insurance

A qualifying life event is a change in your life situation that makes you eligible to enroll in health insurance outside of the annual Open Enrollment Period. These events trigger a "special enrollment period" that typically lasts 30 to 60 days, during which you can select a new plan or add a new dependent to your plan.

Loss of Health Insurance Coverage

• Turning 26 and losing coverage through a parent's insurance plan
• Losing job-based coverage, COBRA, or a student plan
• Losing eligibility for Medicare, Medicaid, or the Children's Health Insurance Program (CHIP)
• Losing health insurance for any reason other than not paying the premiums

Changes in Household

• Getting married, divorced, or legally separated
• Having a baby, adopting a child, or receiving a foster child
• Death of someone on your health insurance policy

Changes in Residence

• Moving to a different county or zip code
• For students, moving to or from school
• For seasonal workers, moving to or from a work location
• Moving in or out of a shelter or transitional housing

Changes to Your Eligibility

• Changes in income that affect your eligibility for Medicaid coverage
• Becoming eligible for tax credits that lower premiums after already having an ACA plan
• Becoming a member of a federally recognized tribe
• Becoming a new US citizen and gaining eligibility for Marketplace coverage
• Beginning or ending service as an AmeriCorps VISTA member
• Being discharged from the military
• Being released from incarceration

Open Enrollment Period for changing insurance plans

The Open Enrollment Period (OEP) is the annual period when anyone can make changes to their health insurance plan. This period typically runs from November 1 to January 15 of the following year, though some states have adjusted dates. During the OEP, you can make changes to your plan as often as you like, and these changes can include buying your first health insurance plan, adding or dropping someone from your plan, modifying your coverage, changing your plan and associated deductibles or copay options, or even cancelling your insurance altogether.

Outside of the OEP, you can only change your insurance plan under special circumstances, such as qualifying life events, which trigger a Special Enrollment Period (SEP). A qualifying life event is a major change that triggers a potential need for additional health insurance, such as marriage, having a baby, divorce, or loss of coverage due to job loss. During an SEP, you typically have 30 to 60 days to make changes to your plan, and these changes may be limited depending on the qualifying life event. For example, you may be required to choose a new plan that is in the same category as your current plan.

Types of Special Enrollment Periods

There are several types of Special Enrollment Periods, which are triggered by different qualifying life events. These include:

• Changes in household: Getting married, having a baby, getting divorced, or the death of a covered family member.
• Changes in residence: Moving to a new ZIP code or county, moving to or from a place of education, or moving to or from transitional housing.
• Loss of health coverage: Losing health coverage through an employer or family member, losing individual health coverage, or losing eligibility for a student health plan.
• Changes in income: Losing or gaining eligibility for savings on a Marketplace plan due to changes in household income.
• Other qualifying changes: Gaining membership in a federally recognized tribe, becoming a U.S. citizen, leaving incarceration, or starting or ending service as an AmeriCorps member.

How to Make Changes to Your Health Insurance

The process of changing your health insurance plan will depend on the specific type of changes you want to make. However, here are some general steps to follow:

• Log into your Marketplace account and locate your existing application.
• Select "Report a Life Change" to see if your life change qualifies you for a Special Enrollment Period.
• If you qualify, you can then make the allowed changes to your coverage.
• You can also make changes over the phone, by contacting your insurance company directly, or by working with a trusted agent.

Reasons to Change Your Coverage

There are several reasons why you may want to change your health insurance coverage. These include changes in your household, such as getting married or having a baby, changes in your employment or finances, changes in your location, changes in your age or health, or changes to your current health insurance plan.

It's important to review your insurance coverage regularly, especially after major life changes, to ensure that you have the coverage you need.

Special Enrollment Period for changing insurance outside of the OEP

A Special Enrollment Period (SEP) is a window of time when people can enrol in health insurance outside of the yearly Open Enrollment Period (OEP). To enrol in a new health plan outside of the OEP, you must have experienced a qualifying life event (QLE) which triggers a SEP.

A QLE is a significant change in your life that would make you eligible to enrol outside of the OEP. This could include losing health coverage, getting married, having a baby, or becoming a citizen. Here are some examples of QLEs that would trigger a SEP:

• Losing health coverage: This includes losing job-based coverage, individual coverage, or coverage through a family member. It also includes losing eligibility for other coverage, such as student health coverage or Medicaid.
• Changes in household: Getting married, having a baby, adopting a child, or adding a dependent to your health insurance can trigger a SEP. You typically have 60 days from the date of the event to change your coverage.
• Changes in residence: Moving to a new home in a new ZIP code or county, or moving to or from a place of education or seasonal work, can trigger a SEP.
• Changes in income: An increase or decrease in income that affects your eligibility for Medicaid or Marketplace subsidies can be a QLE.
• Citizenship status: Becoming a U.S. citizen or gaining permanent resident status is a QLE.
• Exceptional circumstances: The Marketplace recognises that life events can sometimes be hard to categorise. If you experience a major life event that doesn't fall into one of the above categories, you may still be eligible to enrol during a SEP.

It's important to note that the rules and requirements for SEPs may vary from state to state, so be sure to check with your state's Marketplace or Medicaid office for specific information. Additionally, while pregnancy is not considered a QLE in most states, your current insurance should cover prenatal care provided in-network.

Frequently asked questions