Letter to Employee to Cancel Health Insurance

Employee health insurance is a benefit that an employer extends to his employees as a job benefit. Different employers choose to pay for the employee health insurance plan because they are concerned about the health and well-being of their workers.

Medical health insurance of an employee is a very common job perk that a person working for a firm can avail of. People often don’t like to work for an employer who does not offer medical insurance coverage to their employees because it shows that they are mean and don’t care for people who work for their company’s growth. 

What is a letter to an employee to cancel health insurance?

It is a letter that a company writes to an employee when it wants to inform the employee that the company will no longer pay for the health insurance plan the employee and the employee will not be able to get the health expenses covered by the company in the future.

Health insurance is a part of the job contract

When a person joins a company, he is informed about all the benefits he will be able to avail himself after joining the company through the employment contract. When there is any change in those terms and benefits, it is the basic responsibility of the company to let the employee know about it. This letter makes everything clear and after reading it, the employee cannot claim medical health insurance coverage in the future.

When to write to cancel the health insurance?

Some of the common situations when a company chooses to terminate its benefits are:

  1. When the company is going through a financial crisis and cannot pay for the employee’s insurance plan
  2. When there was a certain criterion set by the company for the employee to be eligible for health insurance coverage and the employee no longer meets that eligibility criterion
  3. When the company’s agreement with the insurance company has come to an end due to any reason and now coverage of every employee is being canceled
  4. When there is a change in the policy of the company regarding covering the health-related expenses of the employees.

Only include the necessary details in the letter

This letter needs to be drafted with care because there should not be any confusion left in the mind of the employee after reading this letter. Some common details are:

  1. News of the cancellation
  2. The date on which the health insurance will be canceled officially
  3. Specifics of the health insurance plan that has been canceled
  4. The reason behind the cancellation
  5. Statement of Gratitude

Here is an example letter that you can read and get a basic understanding of:

Sample letter:

Subject: Cancellation of health insurance

Respected [mention the name of the employee],

We are deeply regretful to let you know that we need to cancel your current health insurance coverage, effective [mention the date of cancellation]. We would like to let you know regretfully that we will not be able to pay for your health insurance coverage from now onwards.

Please know that we are not happy to take this decision and we are aware of the kind of trouble you and your family will face after the cancellation. However, we had to take this decision because of the financial setbacks our company is going through. At this point, we will be able to pay the salaries to our respected employees and some other very basic benefits.

Please note that if you want to continue with the health insurance coverage in the future, you will be responsible to pay for the coverage as the company will not pay on your behalf anymore.

We encourage you to contact the HR department if you have any questions regarding this matter. Furthermore, we highly appreciate your understanding and cooperation in this matter and we hope that we will soon resume the coverage of the health insurance of our employees.


[Name of the sender]
[Name of the company]

Letter to Employee to Cancel Health Insurance

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