Most people are thrilled at the prospect of acquiring employment that offers health benefits. It means that you have insurance coverage, and in the United States, health insurance is an absolute necessity. But not everyone is happy with the health insurance plan that their employer provides. You may not be satisfied with the type of coverage that the plan offers, for example; or, you may have recently gotten married and are now covered by your spouse’s employer-sponsored health insurance plan; perhaps you are interested in acquiring a private health insurance plan.
Whatever the case may be, if you are covered by an employer-sponsored health insurance plan, you might be wondering if you are actually allowed to drop it.
Employer-Sponsored Health Insurance is Voluntary
You are not legally required to carry the health insurance that your employer provides. Though the company you work for may offer coverage, whether or not you decide to take on that coverage is entirely up to you. You cannot be forced to take the policy. For example, if you already have health insurance that you are happy with, you may elect to forfeit coverage from your employer. That is perfectly reasonable and legal. But, what if you already have coverage from your employer and you decide that you want to drop the plan after you have already obtained coverage?
You Can Drop Employer-Sponsored Health Insurance Coverage
Just like taking your employer’s health insurance plan is voluntary, so is dropping it. For instance, if you had insurance through your employer but got married and you’ve been added to your spouse’s insurance plan and no longer wish to keep your employer-sponsored health plan, you can drop your coverage. Do be aware, however, that you will have to prove that you have secured coverage from another health insurance provider. Furthermore, you may only be allowed to drop your plan during the enrollment period. Additionally, it’s important to be aware that there may be stipulations associated with dropping your coverage. For example, you may have to pay a fine if you decide to nix your employer’s plan, and that fine may be due when you file your income taxes for the year.
There is a chance that you will be able to drop your employer’s health insurance plan at any time of the year, outside of the open enrollment period; but, you will have to prove a qualifying event in order to do so. Things like, “I just want to drop my coverage” or “it costs too much” aren’t considered qualifying events. To find out what events would allow you to qualify for dropping your employer-sponsored health insurance, speak to your company’s human resources department or contact a representative from your health insurance company.
Securing Alternative Coverage
As mentioned, if you are covered by your employer’s health insurance plan, you will have to prove that you have secured alternative coverage before you will be permitted to drop your existing coverage. For example, you can purchase a private policy through the Affordable Care Act Marketplace during the yearly open enrollment period or a special enrollment period. Once you have secured coverage, you must then present proof of your coverage to your employer. Why? – Because under the Affordable Care Act, all US citizens must carry health insurance, and if you are dropping your employer-sponsored coverage, you must show that you have alternative health insurance in place.
Summing It Up
If you are interested in dropping your employer-sponsored health insurance plan, you certainly reserve the right to. However, doing so is more involved than simply saying, “I don’t want coverage anymore” and dropping your policy; there are stipulations, and you will have to ensure that you abide by those stipulations before you drop your coverage. Make sure that you find out exactly what type of rules apply to dropping coverage and ensure that you are abiding by those rules before you attempt to drop your coverage. Furthermore, be aware that you may need to pay a fine if you drop your coverage, and the amount may be exorbitant.
If dropping your employer’s health insurance coverage is in your best interest, you certainly can do so, as long as you meet the stipulations.