Across the country, the State guidelines for voluntary group insurance termination and Medicare vary. Federal laws offer an extra layer of protection when changing, buying, or continuing health insurance.
Federal and State laws may affect health benefits; the same is true for millions of Americans and their families. Understanding state rules is essential to making changes to your health insurance; especially, when canceling.
Ending employer benefits for Medicare is a big switch. The size of an employer may determine if the switch in insurances is best.
Once you cancel a group plan, you may not be able to go back.
Terminating Group Insurance
If you decide to end your group plan for personal reasons, this is voluntary group termination. Before dropping your policy, think about the cost of your group plan.
Some people have a low premium and out of pocket costs; however, some people spend more.
You may find that you’re spending more on group insurance than you would with Medicare. In this case, termination is valuable, and Medicare is a better plan.
However, this isn’t always the case.
Voluntary Insurance Termination & Medicare Eligibility
Medicare can start when your 65th birthday rolls around. If you decide to keep working after turning 65 and your employer offers health insurance, you may be looking for the best option.
Employer health insurance and Medicare may be the answer for some; for others, it may not be that simple. It’s common among the baby boomers to continue working after retirement age.
However, voluntary insurance termination rules change among states. Most states have specific regulations for voluntary group termination, while others have none.
Guarantee Issue Voluntary Group Termination Available with No Conditions
Many decide to drop their group insurance and allow Medicare to take over as the primary insurance to save money. Also, when canceling coverage, there may be times where you’re eligible for Guaranteed Issue (GI) rights.
GI rights are your protection from medical underwriting that determines the cost. GI rights require companies to cover you, no matter the status of your health; also, insurers must give you the lowest available rate.
Residents of individual states may have GI because of voluntary group termination options with no conditions or specific guidelines. Places, where no conditions apply, means people always qualify.
Guarantee Issue Voluntary Group Termination Available with Conditions
Many states have GI for voluntary group termination; meeting terms is a must. A standard guideline for GI when leaving group coverage in many says, “if the employer plan is primary to Medicare.”
Under this rule, you have GI rights for voluntary group termination if your employer’s plan is the primary health insurance, and Medicare is secondary.
The protection of California law provides residents the right to buy a Medigap policy for six months when losing benefits.
This law applies to group health benefits, whether the plan is primary or secondary to Medicare.
State legislation often exceeds federal rules surrounding the GI.
Missouri has a once a year opportunity to change supplement plans. Although, you must switch to another company offering the same Medigap plan – at a cheaper rate.
Maine has GI rights to change Medigap plans to another with equal or fewer benefits when coverage gaps are within 90 days from enrollment.
Also, in Maine, insurers must offer Plan A to anyone applying during their annual 30-day window.
In Iowa, GI is available after group insurance benefits are lower, but a definite amount of remaining benefits isn’t possible.
Guarantee Issue Voluntary Group Termination Not Available
GI rights aren’t available in all states when you voluntarily terminate group insurance. For example, Alabama, Arizona, Connecticut, D.C., Delaware, Georgia, and Hawaii are just some of the states on this list.
Most states in the U.S. don’t even have the option for GI; these citizens must be extra careful when leaving group insurance.
States where GI won’t apply when choosing to drop coverage include; Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, New Hampshire, North Carolina, South Carolina, North Dakota, Rhode Island, Tennessee, Utah, Vermont, and Wyoming.
Guarantee Issue When Employer Substantially Reduces Benefits
In the states of New Mexico, Oklahoma, Virginia, West Virginia, and Iowa beneficiaries can use GI rights to switch from employer coverage to Medigap. The switch can only occur when the employer policy greatly reduces benefits.
You’ll get a letter explaining your eligibility if this happens to you. When you get the letter, keep it in a safe place as proof of your eligibility.
Involuntary vs Voluntary Group Insurance Termination and Medicare
Losing a group plan is out of your control; it’s involuntary termination. Choosing not to pay your premium is a voluntary loss of coverage.
GI rules differ depending on if the loss of benefits was on purpose.
GI rules for unintentional loss of coverage, a 63-day window starts the date your plan ends.
You must choose a plan during this time for GI rules to apply. Also, this window allows you to buy Medigap plans A, B, C, F, K, or L.
Plans G, M, and N are not available unless you want to go through underwriting or if your 65th birthday is here; this means you’re eligible for the Medicare Supplement Open Enrollment Period (OEP).
States may require you to lose coverage involuntarily for GI rights, and others offer GI rights for all termination.
5 Tips for GI Rights and Medicare
One thing any agent will ask is “do you have your letter of creditable coverage”; the company is going to need that letter if you want GI rights.
The certificate of Creditable coverage comes from the previous health insurer. The letter informs the new plan about your last policy, either proving or disproving eligibility.
If you get a letter telling you the plan is ending, or if you are choosing to complete a plan, these tips are essential.
- GI windows exist across the country
- Keep any record that proves you qualify
- If coverage stops, keep the letter. Insurers send these letters within two weeks of the last day of benefits
- Keep this letter safe
- Being able to prove the loss of benefits means an easy plan change
Our team of agents knows GI rules for each state. For help with the laws in your area, give us a call today!
Also, fill out an online rate form and learn more about the rates in your area! Our team of experts will contact you to help you down the road of Medicare.