Protection Against Rescission Under ACA
The Affordable Care Act (ACA) protects enrollees from rescission. Rescission is a cancelation or discontinuation of coverage that has a retroactive effect. Plans and issuers generally must not rescind coverage unless there is fraud, or if an individual makes an intentional misrepresentation of a material fact.
Protections Against Rescission
- The plan sponsor may not terminate coverage retroactively if the member was covered through plan error and the member paid premiums or contributed to the cost of the plan.
- If the member paid premiums or contributed to the cost of the plan, the plan sponsor may only terminate the member’s coverage with a future or prospective date of termination. This limits the liability of the employer to correct administrative errors.
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