If you have recently secured a health insurance policy through the Affordable Care Act and have had that policy cancelled you may want to know about some of the consumer protections available to you. Because some consumers have investigated alternate coverage options after having their policy cancelled and found them to be more expensive President Obama announced a transition period that allows for the renewal of cancelled plans and policies between January 1 and October 1 2014 under certain circumstances. Some states have already adopted the transition policy enabling health insurance issuers to renew their existing plans and policies however some health insurance issuers are not renewing cancelled plans or policies.
If you are an individual who has purchased health insurance through the ACA and your policy has been cancelled there are many options available to you that will enable you to keep affordable health insurance coverage. Here are a few of the main options you might want to consider if your policy has recently been cancelled.
Options for Consumers Whose Health Insurance Policy Has Been Cancelled:
- You have a chance to buy any of your health insurance issuer’s individual market policies available to you in 2014.
- Through the Health Insurance Marketplace (the Marketplace) you may shop for coverage and depending on your income and several other factors you may be eligible to receive a premium tax credit that will help cover the cost of purchasing coverage through the Marketplace or cost-sharing reductions for Marketplace coverage. You may also be eligible for Medicaid.
- You can also shop for policies outside of the Marketplace. This is a good option if you do not qualify for premium tax credits or cost-sharing reductions that are available to you if you enroll through the Marketplace.
What Do I Do if My Health Insurance Policy Will Not be Renewed?
If you have been notified that your policy will not be renewed you will be eligible for a Hardship Exemption and eligible to enroll in catastrophic coverage. If after examining other plans you believe that the plan options available in the Marketplace in your area are more expensive than your cancelled health insurance policy you will be eligible for catastrophic coverage if it is available in your area. If you would like to purchase catastrophic coverage you will need to complete a hardship form and indicate that your current health insurance policy is being cancelled and you consider the other available policies unaffordable. The following items will then need to be submitted to an issuer who offers catastrophic coverage in your area:
- Hardship Exemption Form
- Supporting documentation indicating that your previous policy was cancelled. (cancellation letter from insurance company)
If you are applying for catastrophic coverage from the same issuer that cancelled your previous policy the issuer may be able to confirm cancellation based on its internal records. Catastrophic coverage can then be purchased from that issuer. That issuer will then send these items to the Centers for Medicare and Medicaid Servies (CMS) to be verified that you are eligible for this hardship exemption. If you are not able to produce supporting documentation that is requested at the time you submit the exemption form CMS will contact you to let you know your application is incomplete and cannot be processed until you submit the supporting documentation from your previous policy’s cancellation.
If you would like to explore the options of Hardship Exemption please contact Lindemeyer CPA and we will walk you through the process and help put you back on the road to affordable health insurance coverage.