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Timeline of Provisions

Consumer Protections (Rescissions)


Rescission is a retroactive cancellation or discontinuance of coverage, due to fraud or intentional misrepresentation of material fact. Certain protections regarding cancellation of coverage were already provided by the Public Health Service Act (PHSA) and the Health Insurance Portability and Accountability Act (HIPAA). Beginning September 23, 2010, this provision provides additional protections against retroactive cancellation or discontinuance of coverage.

Rescission is permitted only for an act, practice, or omission that constitutes fraud, or an intentional misrepresentation of a material fact. Rescission is not permitted in the case of inadvertent misstatements of fact.

If the rescission is permitted under Federal and State law, the coverage may be retroactively terminated. Thirty (30) calendar days advance written notice is required when coverage is to be rescinded, and the notice must include the appeal rights as required by law and as provided in the member's plan benefit documents. The purpose for the advance notice is to allow the affected individual(s)/group(s) to explore other coverage and their rights.

For More Information

Rescissions Provision Summary (PDF)

Frequently Asked Questions

What's the difference between rescission of coverage and a retro-cancellation of coverage?

Rescission has a specific legal meaning and it does not apply at all to retroactive cancellations. A rescission of health plan coverage means the person, or group, never had the health plan coverage. In contrast, a retro-cancellation or retroactive termination means the person, or group, had health plan coverage for some period of time, and they retain that coverage up to the cancellation point.