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| *Ostroff, Fair and Company>>>Insurance |
Can a company legally refuse to cancel your medical plan when you want it cancelled? |
A young mother of 2 children, going through a divorce signed up for medical through her contract house. She has a low paying job, and they are charging her $125.00 a week. They have only taken 1 payment so far and she won't be officially covered for 30 days. She decided to cancel this insurance after the 1st week; and her contract house said "NO". Is this legal?? Potentially.......yes. If she signed a contract that states she is buying coverage for a set term and you are in the middle of that term, then you have to fulfill it, so the company then would have the right to refuse to cancel the policy. One caveat....there may be a state law in your state that allows consumers to get the policy cancelled as a consumer protection measure. My state does not have this, but it may be in place in other states. If you continue to be concerned, you can contact your state's office of the Insurance Commissioner and ask for the consumer protection division. They might be able to help you get out of the contract. Depends on what the contract says. Perhaps she'll have to declare bankruptcy. Maybe she should read documents carefully before signing them. It all depends on what her contract stipulates as the period of time for the contract. If you signed up for a 1 year pollocy and you signed a contract which oblogates you to pay a certain amount each month then no. Now if its something set up through a group insurance polocy you have to go to the holder of the polocy, usually the employer, and sign papers stating your refusing insurance and that you are not going to pay for it. If its a private polocy without a tearm of service agreement then they would have to cancel the polocy upon request at the end of the period which had been paid for, they are under no oblogation to reimbers anything paid in already, but they must reconise the contract until that transaction has expired. Many insurance carriers may also have a fee tacked on, which is not unlike that of cellphone providers, which require the holder to pay a fee for early cancilation of the polocy, but they would have to offer this to you if its avalible, they just can't deny it outright. The best option in this case is to find the exact agreement with this insurance plan and find out if it is cancelable, if it is and whomever is incharge refuses to cancel it the person should contact the local government agancy in charge of that group, be it the employer or insurance company. Unless the law stipulates that insurance is required there is no way to force insurance on somebody, they have to give an opt-out option. Does she have the actual policy in her hands yet? All individual (i.e. non-group) health insurance contracts issued in the U.S. MUST have what's known as a "free look" period. During this time, a person can review the contract and, if it's insufficient for their needs or if they don't want it anymore, they can cancel and receive all their money back. The cancellation must occur during the "free look" period, or the premium is considered "earned" by the Company. The duration of the "free look" period will be printed on one of the very first pages of the policy. If she hasn't received the policy yet, her "free look" period hasn't begun yet and she can cancel, expecting a full refund. If the broker (I assume this is what you meant by "contract house") won't let her cancel, she should call the insurance company directly. Another good source of information (and assistance, if needed) is her state's insurance commissioner' office. She can give the commissioner's office a call and speak with an investigator or Consumer Affairs officer. She may have other legal rights and/or obligations in her state, so this option is recommended. I hope this helps. I have no idea what a "contract house" is - if it's an agent, or an employer. But yes, most of the time your policy has to be cancelled in 30 day increments, unless you've replaced it with ANOTHER policy, in which case, they can cancel it on the day the NEW policy went into effect. agent, 20+ years if she has put her name in the botted line then she has to take it until it ends. I'm so sorry to say it but yes it's legal and she can't pull out yet, after about three months or so then maybe she can but, till then she might need to see a lawyer about it. hope you have a great day!!! |
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