Can an Employer Terminate Health Insurance Without Notice?

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  • If you're enrolled in health insurance benefits through your employer, you may have wondered whether they can cancel them without telling you. Find out more below.
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Can an Employer Terminate Health Insurance Without Notice?

The answer is: It depends. 

Whether or not your employer can terminate health insurance without notifying you depends on your employer's size. Large employers are required to provide health insurance to employees under the Affordable Care Act, but small businesses have more discretion.

If your employer is a small business and it provides you with health insurance, it can cancel your health insurance without notice in some cases. The law is unclear as to whether or not small businesses can do this legally.

Large Businesses Under ACA

In general, a company is considered a large business in the eyes of the ACA if it has more than 50 full-time employees. Full-time employees are defined as individuals who work more than 30 hours a week. If you are enrolled in health insurance through your employer and it fits the definition of a large business, it cannot legally cancel your insurance, with or without notice.

Consider State Laws

While federal law dictates most of what's outlined in the Affordable Care Act, your local state laws may apply as well, so check with your state's marketplace health insurance program or your state's Department of Labor to find out specifics local to your area.

Contact Human Resources

If you discover that your employer has suddenly stopped paying for your health insurance plan, contact your employer's HR department or your supervisor for answers. In some cases, it could be a misunderstanding — for instance, say your employer's health insurance provided coverage for you and your domestic partner, and then you parted ways. When the relationship ends, so does the health insurance coverage for your former partner.

Or suppose your insurance covered you and your spouse, who was previously unemployed. If they get a job, many employers won't provide coverage for a spouse if they're eligible to enroll in a health insurance plan themselves through their own employer. 

If there isn't a valid reason for cancelling your health insurance, you might have a reason for a lawsuit. In this case, contact a lawyer you trust to find out what your options might be.