Plan administration is an important job! An eligible employee who is not insured correctly or who has not been offered benefits can not only have a negative impact on the employee’s well-being but it can also pose liability issues for you and the business.
What types of plan administration tasks do you need to remember?
Most such tasks apply to all employees so they should become an automatic part of your group benefits plan administration. Some of the most important tasks include the following:
- It is the employer’s responsibility to ensure that each employee is enrolled properly and on time. If an employee is enrolled late on the plan (typically 31 days after becoming eligible to join), his or her coverage is typically not guaranteed. The employee and his or her dependents will be considered late applicants, and will need to complete and submit forms about their health. They will then need to be medically approved before enrolling on the plan, at which point they will likely learn that their coverage is restricted or has been declined entirely. This not only has the potential to negatively impact the employee’s and/or dependents’ well-being but it also poses a significant liability risk to the employer. It is far better and easier on everyone for an employer to enroll an eligible employee properly and within the required timeframe.
- In almost all cases, it is to the employer’s and employees’ benefit to make participation in the benefits plan mandatory. If an employee was permitted to join a plan only when he or she anticipates needing a claim paid, this would make the plan financially non-viable; both non-claimers and claimers need to be contributing premiums into a plan to build up funds to cover claims (similar to home and other forms of insurance). This is why Wiegers Financial & Benefits recommends that employers make participation in their benefits plan mandatory for all eligible employees. If, though, you wish and are able to permit employees to waive all benefits coverage under your plan, it is important that you have those employees sign a group benefits plan waiver form that makes clear that you offered coverage to these employees but that they chose to decline it.
- Almost all group benefit plans permit an employee to waive Health and/or Dental coverage if he or she has comparable coverage through another plan (typically a spouse’s plan). The employee must be enrolled for all other applicable benefits on the plan as Life, Disability and other benefits are not offered to dependents.
- Changes to an employee’s coverage must be submitted to your group insurance carrier no later than 31 days after the event. Have your employees communicate regularly with you about changes that need to be made such as:
- Marriage, divorce, new baby, legal guardianship of child (requires proof)
- Overage dependents, enrollment in a secondary school with the required amount of classes
- Note: dependents over age 18 working more than 20 hours per week are not considered eligible for coverage under a parent and should be removed from the benefits plan
- If you have employees who are eligible to apply for additional Life and/or Disability coverage over-and-above what is automatically provided through your benefits plan, it is your responsibility to advise them of the option to apply. To apply, the employee must complete a health questionnaire provided by the carrier. If he or she chooses not to apply, Wiegers Financial & Benefits recommends that the employee sign a waiver confirming that he or she is aware of the option to apply for additional coverage but has decided against it.
There are, predictably – or not-so-predictably – a number of other plan administration tasks that employers like you need to be diligent about remembering to do to ensure that your employees and their dependents have all of the coverage available to them (and that you’re not doing anything to put yourself or your business in a liable position). An effective and talented benefits advisor will ensure that you are aware of all of the plan administration tasks you need to be aware of, and will ensure that you are also aware of any particularities about your own plan that differ from the norm. As long as you remember to do what you need to do, you’ll have a benefits plan that helps you take care of your valued employees and their families while also preventing you from liability. Benefits plan administration done correctly is a win for all.
Benefits Account Manager
Wiegers Financial and Insurance Planning Services Ltd.