Every year, thousands of Americans lose their health insurance when they get sick. People with disabilities have been disproportionately affected by this harmful health insurance practice, known as a “rescission.”

What is a rescission?

A rescission is when an insurance company voids your health plan from the start of coverage.  It usually happens usually when an insurer retroactively cancels your policy when you become sick.  Insurers often claim that you had a pre-existing condition or they find some reason to say they would not have offered coverage to you in the first place.  This can happen even if it was an unintentional mistake in the paperwork made by you or your employer.

How does the law change rescissions?

Rescissions will be prohibited. Insurance companies won’t be allowed to drop your coverage when you get sick except in the case of fraud or intentional misrepresentation. The insurers must provide at least 30 days advance notice to give people time to appeal the decision.

Will all plans be affected by the rescission changes?

Yes, both new and grandfathered plans are covered.