Before the ACA was passed, health plans could - and often did - rescind policies when an enrollee became sick, if he or she (or the employer) made an unintentional mistake filling out the application paperwork. Rescissions can leave consumers responsible for thousands of dollars in unpaid insurance claims through no fault of their own.
The ACA prohibits all health plans, including grandfathered plans, from cancelling (or rescinding) a health insurance policy once an enrollee is covered, unless the person has committed fraud or made an "intentional misrepresentation of material fact" in the application. A rescission is a retrospective cancellation of an enrollee's policy, typically back to the date of initial enrollment.
The ACA also requires health plans, if they do rescind a policy, to provide a minimum of 30 days notice to the enrollee, including information on their right to appeal the rescission decision.