Notice of Rescission of Coverage A participant’s medical coverage cannot be rescinded unless the participant performs an act, practice or omission that constitutes fraud or and intentional misrepresentation of material fact. McLeod must provide at least 30 days advance written notice to each participant who would be affected before coverage can be rescinded, regardless of whether the coverage is self-funded or fully-insured. The regulations define a rescission as a cancellation or discontinuance of coverage that has a retroactive effect. For example, a cancellation that treats a policy as void from the time of the individual’s or group’s enrollment is a rescission. A cancellation is not a rescission if: (1) the cancellation has only a prospective effect, or (2) the cancellation is effective retroactively to the extent that it is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage. McLeod is permitted to rescind coverage if you commit fraud or if you intentionally misrepresent material facts.
