'It wasn't an ACA plan, but it was meaningfully cheaper than anything I could find on the ACA exchange"

"It was marketed as group coverage for self-employed 'working owners,' and it was meaningfully cheaper than anything I could find on the ACA exchange." (Photo subject is a model.)

Dear Quentin,

I've spent 40 years working in IT. I know how to verify a system, troubleshoot a failure and stay calm when something breaks. None of that helped me on the Tuesday after Labor Day, when a billing representative told me - after an hour on hold - that the health insurance I'd been paying for through my LLC no longer technically existed.

I'm self-employed, running a small consulting business through my own LLC. Like a lot of self-employed people, every year I run the numbers and find that an Affordable Care Act $(ACA)$ Marketplace plan at the full, unsubsidized price is more expensive than one of the "alternative" group plans marketed to freelancers and gig workers. I chose the latter, a PPO plan.

It wasn't an ACA plan, but it was meaningfully cheaper than anything I could find on the ACA exchange. It worked fine - until I actually needed it. I was trying to schedule a hip MRI on both hips when the imaging center told me my coverage was "not active." I was told its verification system was simply down. Fair enough. Systems go down. After 40 years in IT, I get it.

But when the imaging center called back, my coverage was still showing as inactive. This time, after another hour on hold, I got a real answer: Effective Sept. 1, the Nebraska insurance company dropped my policies entirely - the entire group - and the third-party administrator was "in the process" of moving affected members to another "ACME" insurer.

It wasn't an ACA plan, but it was meaningfully cheaper than anything I could find on the ACA exchange.

There had been no advance notice. No letter. No email. Just the explanation that the verification system was down - an explanation that, in hindsight, seems to have concealed the more important fact that my coverage had already ended three days earlier. I still don't have my MRI, and I don't yet know whether the doctor who ordered it even accepts the ACME insurer.

That's where I'm stuck, and where I'm hoping you can help: Is there any meaningful recourse against an administrator that provides essentially no notice before a network termination like this? Is there a regulator or complaint process that actually has teeth, rather than simply generating a case number?

It feels as though I did everything a reasonably careful consumer could do. Is the loss of non-ACA "Working Owner" coverage like this ever considered a qualifying life event for an ACA Marketplace Special Enrollment Period? Or does the fact that this wasn't ACA coverage in the first place shut that door?

For the immediate problem - an MRI I need, with my insurance coverage in limbo - is there a smarter move than either paying cash or waiting for an insurer? And for the future, are there self-employed coverage options I've overlooked that don't carry this kind of tail risk, short of simply going back to a full-price ACA plan?

Self-Employed and Stuck

Related: 'I'm not interested in long-term care insurance': I'd like to retire at 55. How much will I have to pay for healthcare?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

A health-insurance company cannot terminate your coverage without 30 days of advance written notice.

Dear Self-Employed,

Either they dropped the ball, or you missed the letter.

Fully insured, state-regulated plans require insurers to give you written notice before terminating coverage - usually 30 or 60 days. Unless you actually set out to defraud the insurer, the company may not cancel your coverage even if you made a mistake on your application. But you do need to determine what law governs your plan - the Affordable Care Act of 2010 (ACA) and/or Employee Retirement Income Security Act of 1974 (ERISA).

Whether or not losing your coverage opens a Marketplace Special Enrollment Period (SEP) largely depends on whether your insurance contains "minimum essential coverage" (MEC). Many "alternative" or association-style plans sold to the self-employed do not have MEC, which is why they are often cheaper than ACA plans. If your plan was sold to you as "working owner" coverage, it's governed by the Employee Retirement Income Security Act.

A lower premium isn't necessarily the bargain if the end of the policy leaves you with a gap in your coverage.

To eliminate "tail risk," the catastrophic exposure of an uncapped medical emergency, use coverage that falls under ACA's consumer protections, as outlined in Healthcare.gov's guide to what ACA plans cover. Open Enrollment is between Nov. 1 and Jan. 15. If you enroll by Dec. 15, coverage begins Jan. 1. If you enroll between Dec. 16 and Jan. 15, coverage starts Feb. 1. Unfortunately, that's four to five months from now, but it's still worth pursuing.

As for your MRI: ask the doctor who ordered it whether the imaging is time-sensitive, and weigh the risk of delay. Separately, call the imaging center directly and ask about a self-pay or prompt-pay rate, which can be a fraction of billed charges - and ask your third-party administrator whether your "ACME" coverage will be retroactive to Sept. 1. Ask them, in writing, for evidence that they gave you the required notice, and why the coverage was dropped.

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Alleged lack of notice

The National Association of Insurance Commissioners should direct you to the insurance commissioner in your state. But first, determine whether you had state-regulated insurance. If the arrangement is self-funded or otherwise subject to the Employee Retirement Income Security Act (ERISA), the state insurance department may have limited jurisdiction. If that's the case, contact the Department of Labor's Employee Benefits Security Administration instead.

Regarding the alleged lack of notice, you can compile the evidence - emails and screenshots - from your insurance company, and put your case to them in writing that you were, as you suggest, unceremoniously dropped without notice, and "cc" your broker or the association that sponsored your plan. Keep original documents, certificates of coverage, premium records, small print relating to your benefits, and reference numbers of all communications/complaints.

Finally, before buying another "alternative" plan to the ACA marketplace, find out exactly what you're buying, whether the plan is fully insured or self-funded, subject to state insurance regulation or subject to ACA requirements and, crucially, what happens if the sponsoring group or insurer disappears again. A lower premium isn't the bargain it appears to be if the policy's cancellation leaves you with this kind of uncertainty and, worse, a gap in your coverage.

Good luck with this bureaucracy of becoming unstuck.

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By emailing your questions to The Moneyist or posting your dilemmas on The Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.

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-Quentin Fottrell