Group Benefits – Keep Employee Information Up-To-Date

Why is it important to keep employee information up-to-date?

If you have short- or long-term disability on your plan, the amount of coverage a plan member is eligible for is based on their reported income.  If employee salaries aren’t being updated, your employees will not have the disability income they are entitled to.  For example: When Mary was added to the plan she was earning $30,000 annually, for a monthly disability income benefit of $1,600.  If Mary’s income increases to $40,000 she would then be eligible for a disability income benefit of $2,050.  If Mary goes off on disability without her salary having being updated with your benefit company she will only receive $1,600 in monthly income.

When adding new employees, you will generally have a waiting period – 3 months is most common.  You then have a 31 day grace period to submit their application to the insurance company.   Submitting their application in a timely manner guarantees them health and dental benefits, and at least the minimum amount of disability insurance (if you have disability on your plan).  If you submit their application outside of this window, they will be considered a ‘late entrant’ and their entire family will be subject to medical underwriting (health questionnaires) for all benefits.  This can have many outcomes – from having exclusions for current medications and being declined a drug card, to being declined for coverage entirely.

It is also important to be sure that employees report changes in family status i.e. new spouse, or children.  Only family members named on the plan are covered by the plan.  Children can be added to some plans at birth, and some plans when they are 14 days old.  If you wait to add them, it is possible that there could be a problem as they will be subject to medical underwriting (health questionnaires).  We have seen young children declined coverage due to health issues.  Imagine going on a family trip and discovering that someone in the family doesn’t have travel coverage because they weren’t added to the plan.

These things can, and do, happen.  They are avoidable by keeping employee information up-to-date.

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