Coverage rescinded

What it means

A rescission is a retroactive cancellation. The plan treats your coverage as if it never began, which can mean unpaid claims and demands to repay claims already paid. Federal rules allow it only for fraud or an intentional misrepresentation of a material fact, and only after at least 30 days’ advance written notice.

Retroactive cancellation for unpaid premiums is not a rescission. If that is your plan’s real reason, see the coverage not active page. These rules also reach grandfathered plans, which are still subject to the ban on rescissions. They do not reach short-term plans, which fall outside the Affordable Care Act’s individual-market rules; for those, your policy and state law control.

A rescission is an adverse benefit determination, so you can appeal it and take it to external review.

Who has to act first

You do, and quickly. The 30-day notice is your window to respond before the cancellation takes effect, and you should use it. If you are in treatment, ask your doctor to state in writing that the matter is urgent. A decision on an urgent appeal is due within 72 hours.

For a job-based plan or a non-grandfathered individual plan, you have at least 180 days after you receive the denial notice to file the first appeal; your plan may allow more. Medicare, Medicaid, TRICARE, Veterans Affairs and federal employee plans have different, often shorter, deadlines. Check the date on your notice, which controls.

Arguments that work

• The notice. Check that the notice was in writing and that the cancellation date is at least 30 days after you were told. If not, say so.
• The reason must be specific. The notice must state the specific reason and the plan provisions relied on. Ask the plan to show which statement it says was false, why it mattered, and why it says the statement was intentional.
• Intent is the rule’s test. The rule says fraud or intentional misrepresentation. A good-faith answer, a question you read differently, or an application filled in by someone else is not the same. Explain what you understood and why.
• Your application. Ask for a copy of the application and every document the plan relied on. You are entitled to the claim file free of charge.
• A fresh review. The appeal must be decided by someone other than the first decision-maker, with a health professional consulted if the decision rests on a medical judgment.

Evidence to gather

• The rescission notice and the date you received it (you).
• A copy of your application and any change you made online or on paper (the plan, or the Marketplace if you applied there).
• Messages with the broker, agent or employer who helped you apply (you).
• Premium payment records (you).
• A list of every claim paid and denied since the coverage began (the plan).

What to send

Send a written appeal and a request for the claim file. Ask for the decision in writing. If the plan upholds the rescission, a non-grandfathered plan must give you at least four months after that final denial to request external review. A rescission is on the federal list of reviewable denials.

You can also complain to the regulator: the state insurance department for an insurance company’s policy, or the Employee Benefits Security Administration (1-866-444-3272) for a private employer plan. Tell your providers a dispute is open and ask them in writing to hold any bills; it is not required to, and an unpaid bill can go to collections, so ask before you withhold any payment.

Rescission cases are fact-heavy. Free legal aid is worth contacting early; see the legal aid guide.