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My new job will offer health benefits. Can I drop my ACA coverage when those benefits start?

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Q. I recently lost my job, and with it, my health insurance. But I was just hired for a new job and fortunately, I will be eligible for health benefits. The only drawback is that there is a waiting period. If I enroll in marketplace coverage that starts February 1, can I drop that coverage when I become eligible for my employer’s plan?

A. Yes, you can certainly do that. The loss of your previous employer-sponsored health plan is a qualifying event, so you have a special enrollment period during which you can pick a new marketplace plan to cover you until your new employer’s plan takes effect. When you enroll in an individual health insurance policy (through the marketplace or directly through an insurer), you’re on a month-to-month contract. So you can cancel anytime, effective at the end of the month.

Health insurance carriers generally do not allow pro-rated cancellations, so you can’t contact your carrier on the 10th of the month and have your coverage canceled immediately and get a refund for the remainder of the month. So, for example, if your new coverage begins on September 15, you would most likely be canceling your individual policy as of September 30. But the insurance offered through your new job is likely to start on the first day of a calendar month, making the transition easy.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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