Can You Cancel Health Insurance at Any Time?
You might be able to cancel your health insurance at any time, but only if your plan isn't through your job.
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You need to have a specific reason to cancel a plan you get from your job. If you buy a plan from HealthCare.gov or directly from an insurance company, you can cancel it whenever you want. Just make sure that you're aware of the risks of not having health insurance before you cancel your plan.
Can I cancel my health insurance at any time?
You can only cancel your health insurance at any time if your plan doesn't come from your job.
If you get your health insurance from your job, you can only cancel it for specific reasons and within a set time frame. Most other types of health insurance can be cancelled at any time, but it's often not a good idea.
Employer plans
You can't cancel health insurance from your job at any time.
Instead, you can only cancel your policy after certain events, like marriage or divorce. You'll usually have a window of 30 days to cancel your policy after a life change. You can also let your policy expire at the end of the year and opt out of your job's health insurance the next year.
The reason you can't cancel group health insurance any time you want has to do with taxes. When employers offer health insurance to their workers, both the company and the employees get tax benefits. The only way to cancel health insurance from a job is to meet the requirements, otherwise the company could be in violation of the tax law. These types of plans are called Section 125 plans or "cafeteria" plans.
Marketplace plans
If you bought a plan from HealthCare.gov or a state marketplace, you can cancel it at any time and for any reason.
You can even end coverage for just yourself without cancelling it for other people that might be on the policy, like a spouse or child.
Just remember that once you cancel your plan, you can't buy another one unless you meet certain criteria, like moving or getting married.
Direct health insurance
You can usually cancel health insurance that you got directly from an insurance company at any time, but the specifics depend on your plan.
If you didn't get your plan from a marketplace like HealthCare.gov and you instead bought a plan straight from an insurance company, you'll have to contact the company to learn how to cancel a policy. You might have to send in a written request, for example, or follow specific steps online.
COBRA insurance
If you used COBRA insurance to keep your employer health plan after you left your job, you can cancel the policy whenever you need to. To cancel, contact the insurance company that handles your plan.
However, once you cancel COBRA, you can't get it back. You also likely won't be able to immediately get a marketplace plan. Make sure you have other health insurance in place before you cancel your COBRA coverage.
How to cancel marketplace insurance
You can cancel your marketplace insurance by logging into your HealthCare.gov account.
If you want to cancel coverage for you and anyone else on your plan:
- Log into HealthCare.gov.
- Click "My Plans & Programs" in the menu.
- Click "End (Terminate) all coverage."
- Pick the date you want your coverage to end.
- Click "End Coverage."
You can use the cancellation tool on HealthCare.gov to get exact steps for cancelling a plan in your specific situation. For example, if you're cancelling coverage for just one person on the plan, your steps are different from the ones above.
If you live in a state that has its own marketplace, your cancellation steps will be different. Check your state marketplace site for instructions on how to cancel a plan.
Risks of cancelling your health insurance
Cancelling your health insurance leaves you with the risk of high medical bills if something happens, and you'll pay more for checkups and vaccinations.
High medical costs
If you cancel your health insurance but need medical care, you have to pay for everything yourself. This would be a big problem for most people, considering how expensive it can be to get health care. Emergency room visits can cost thousands of dollars, and the costs are higher if you need tests, medication or surgery.
No coverage for wellness visits
Without health insurance, you have to pay for things like annual tests and vaccines on your own. People without health insurance are more likely to wait or skip getting medical care because of the cost. This can mean you might have to deal with a bigger health problem because you weren't able to catch it early.
Waiting period for a new plan
If you cancel your health insurance, you may not be able to get a new plan right away. You can usually only buy health insurance in the fall, during what's called open enrollment, and your plan won't start until Jan. 1 of the next year. You're only allowed to buy a plan outside of open enrollment if you have a major life change, like moving or losing your job.
Potential penalties
In some states, you might pay a penalty at tax time if you cancel your health insurance without another plan in place. California, Massachusetts, New Jersey, Rhode Island and Washington, D.C., all have laws that require you to have a health insurance policy or pay a fine.
Alternatives to cancelling your health insurance
Before you cancel your health insurance, think about your overall health and finances.
Health insurance can be expensive, but it's also the best way to make health care affordable. Are there other places in your budget that you can save money so you can keep your health plan?
If you have had a major life change, like moving or getting married, you're probably able to change health insurance plans midyear because you get what's called a "special enrollment period." In that case, consider a few options:
- Look for a cheaper plan. Look at the other companies in your area to see if anyone has cheaper coverage. You could also switch to a cheaper type of plan, like an HMO, as long as you're willing to stay inside the network.
- Consider a lower-tier option. If you have a higher-tier plan like Gold or Platinum, you could go down to a Silver or Bronze plan to save money. Just make sure you have enough saved to cover a higher share of your health care costs.
- Check if you can get discounts. These are called subsidies, and they're based on your income. If you've had a change in income midyear, you might be able to get discounts.
- See if you're eligible for Medicaid. In most states, you can get Medicaid if you make less than about $21,500 per year as a single person or about $44,000 per year as a family of four.
Frequently asked questions
What are acceptable reasons to cancel health insurance?
If you have insurance through your job, you can only cancel it for major life events, like marriage, divorce, having a baby or leaving your job. But if you have a marketplace plan or a plan you got directly from an insurance company, you can cancel it at any time and for any reason. Just remember that you can only buy a new plan if you meet the requirements, like having just moved or gotten married.
Can I cancel my health insurance without penalty?
You don't have to pay a penalty fee if you cancel your health insurance in most states. While health insurance is technically required by law, there's usually no fee to pay if you don't have a plan. However, some states (California, Massachusetts, New Jersey, Rhode Island and Washington, D.C.) have laws that do include penalties if you cancel your policy. Make sure you understand your state's laws before you cancel your health insurance.
Can I just stop paying for health insurance?
You can technically stop paying for health insurance, but it's not a good way to stop your coverage. If you no longer need your plan, it's always best to officially cancel it. If you just stop paying, your coverage might keep going for a month or more, and the company will probably charge you for that time, leading to overdue bills.
Sources
Sources for this article include HealthCare.gov, KFF, Newfront and the U.S. Department of Labor.
Editorial note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
