Plan Administration Tip - Check and Update Salaries

Updated: Jan 14

In this post we review the importance of keeping salary and compensation information up to date with your insurer's system.

The end of the year is a good time to cross-reference salary information for your team and your insurer’s system.


Long-term disability benefits, short-term disability benefits, and some life insurance benefits are calculated based on earnings, so it’s important to keep this information up to date.

  • Important tip: check your payroll system against your insurer’s records to ensure that all employee salaries are up to date. Employers can be held liable if an employee is paid out less than they are owed in the event of a long-term disability, short-term disability, or life insurance claim.

If employees’ compensation includes commissions, significant and regular bonuses or dividend income to owners and partners, you should let your insurer know. These details are extremely important in the event of a claim.

  • Important tip: The insurance contract defines what types of income are eligible under the plan. By ensuring that executives or owners, commissioned or hourly employee earnings are eligible as “earnings” under your plan, you are paving the way to a successful claim should the need arise.

Contact us if you need assistance updating salaries or if you would like to ensure your contract reflects how individuals in your organization are compensated.