4 simple ways to keep your employee benefits plan onside and up to date.
Time flies. With so many other priorities and distractions, it's easy to miss making changes to your employee benefits plan. But many changes to your benefits plan are time sensitive, so it's important that you spend the time to ensure your plan is up to date.
Here are 4 simple ways to ensure that your plan remains onside and up to date…
1) Update Employee Salaries
Updating employee salaries each year, if not more frequently, is important. Especially if you have income based benefits such as Short Term Disability, Long Term Disability, or Life Insurance that is tied to a multiple of earnings. If updates are not provided in a timely manner, employees could find themselves underinsured at the time they need the coverage most.
2) Add new employees
Most companies have a waiting period that new employees must satisfy before joining the benefits plan. The most common waiting period is 3 months, which matches up with the probation periods used by many employers. Following the 3 month waiting period, employers generally have 30 days to submit the application for a new hire. If an application is not submitted within this window, you run the risk of a dreaded late applicant scenario.
So what's the big deal about late applicants anyways?
Well...this is the insurance company’s way to prevent employees from opting out of coverage initially, only to apply when they “need” it. Late applicants are those who apply for coverage after their initial waiting, or grace period. They must answer medical questions in order to qualify for coverage. Pre-existing health conditions could result in coverage limitations or refusal. Furthermore, most insurance companies will limit dental benefits for the first 12 months on the plan. Since it's the employer’s responsibility to submit applications, this can be a source of liability for your business.
3) Remove employees that have left
This is typically an easy one to update. Most insurance companies will accept a simple e-mail notifying them of the termination of employment for a plan member. However, it is common practice to refund premiums for a maximum of 3-6 months, so don't leave it too long! In cases where you initiate the employee termination (ie. you fire someone), be sure that you reference the Employment Standards Act as it relates to the statutory notice period requirements. You may be responsible to continue benefits for longer than you think.
4) Stay on top of employee life events
This area may require that you spend more time hanging around the company water cooler. Employee changes such as marriage, common law relationships, child birth and graduation are important items for a plan administrator to be aware of, and should be shared with your group insurance provider. Much like the addition of a new employee, adding dependents to the plan outside of the grace period (30-60 days for most changes) can trigger a late applicant situation.
Regardless of the changes you need to make, your broker should be able to provide the support you need to keep your employee benefits plan running smoothly. If not, it may be time to look for a new broker! After all, Spring is a time for new beginnings.