Why worry about details? You are just being overcautious. That has never happened in the 20 years I have been administering the plan, and I doubt it will ever happen in the future.
These are not acceptable reasons to ignore proper administration practices of a group insurance plan. Employees are aware of their rights, and they will challenge employers if they believe the employer has made an administrative mistake. Administrators of group insurance plans want to avoid any unforeseen administrative errors and ensure that employees have a positive experience with the benefits plan. The following list (by no means extensive) outlines a few tips for best practices that could be included in a plan administrator’s routine.
Beneficiary Updates: After a marriage or divorce, the last thing on an employee’s mind is updating his or her beneficiary for group insurance coverage. Employees should be reminded in writing on an annual basis to update their beneficiary, if required.
Enrollment Forms: Be sure to properly file employee enrollment forms and encourage employees to keep a copy of their form. If you need to send original copies to the insurer, keep a copy for your file.
Communication, communication, communication: The importance of communicating to employees cannot be understated. Employees need to be aware of changes to the benefits plan, new benefits or services, and renewal rate adjustments. In addition, it is good practice to provide general information on the plan so that employees are aware of the mandatory and optional participation benefits.
Continuation of Benefits: It’s important to have a documented policy surrounding continuation of benefits for employees who are not actively at work (for example, maternity or paternity leaves, Workers’ Compensation benefits, long-term disability, leave of absence, deferred salary leave and sick leave). The Continuation of Benefits policy should indicate what benefits will be covered during the leave, for how long and what the cost-sharing arrangement will be. It is important that employees are aware of the policy and that the insurance carrier is in agreement with the policy.
Review Billing Statements: After the renewal has become effective, confirm that the proper rates have been used for the billing statement. Human error can easily lead to inaccurate renewal rates being implemented. In addition, it’s worthwhile to periodically review the billing statement to ensure that all employees are properly enrolled for the appropriate level of coverage.
Avoid Conversation at the Water Cooler: Encourage employees to submit any questions in writing so that you can respond to them in writing. This provides a paper trail of your discussion in the event that there is a disagreement in what was communicated. You do not want to be caught in a game of “he said, she said” over an important benefits issue.
Optional Benefits: Periodically review the enrollment in the Optional Benefits section, and be sure to communicate to employees that these benefits are available.
Non-evidence Maximum Limits: Periodically review the existing Basic Life and Disability coverage amounts to identify employees who have reached the non-evidence maximum and ensure that those employees have been given an opportunity to apply for any potential additional coverage.
Conversion: Be sure employees are aware of any opportunities to convert their coverage under the group insurance plan at the time they are terminated from the plan.
Contract Binder: Have one binder that includes a copy of all group insurance contracts, employee booklets and amendments. Keeping a summary of all plan amendments, the effective date of the amendment and the applicable rate adjustment in this binder is also a worthwhile idea.
Review Contract Details: On an annual basis review the details of your group insurance contract to ensure that your administration practices align with the contract provisions and definitions. Be sure to focus on definitions and provisions such as the definition of eligibility, earnings, dependents, waiting period, termination ages and continuation of benefits.