At Vital Partners, one of our goals is to help plan sponsors administer their benefits plan simply and efficiently. By adhering to simple processes and rules, organizations can significantly reduce risk and liability.
Enrolments, Additions, and Terminations
Add new employees to the plan within 31 days of eligibility. Best practice is to include your benefits enrolment form with your hiring package.
Report any life changes such as marriage, birth of a child, to cohabitation, or divorce to the insurer within 31 days. Life changes include loss of a spouse’s benefits coverage.
Review billing statement monthly to ensure accuracy.
Benefits Communication
Ensure benefits booklets and summaries are up to date
Provide employees with dedicated contacts for their group plan
Organize periodic employee benefits refreshers and ensure that any changes to your plan are communicated in a timely fashion
Advise employees that you can change or cancel benefits at any time.
Report Salary Changes and Definitions of Earnings
Some components of your benefits program rely on accurate salary reporting, such as benefits calculated as a multiple or percentage of earnings.
Ensure that salary increases or decreases are reported to your insurer within 31 days to ensure that benefit payments are accurate in the event of a claim.
Non-Evidence Maximums
Employees can be confused about benefit maximums and non-evidence maximums. Where benefits are paid according to a percentage or multiple of salary, the non-evidence maximum is an important consideration.
For example, if your group’s Long Term Disability benefit offers 67% of earnings as income replacement, an employee earning $110,000 annually may assume that he would be paid $6,141 monthly. But if the plan’s non-evidence maximum benefit for Long Term Disability is $5,000, that employee may you have a $1,141 shortfall.
Consider communicating how much benefit each employee is actually covered for and the process they should use to apply for additional benefits at least annually or when salary changes occur.
Plan Administration Protection
Employee Benefits Coverage is designed to protect your business against lawsuits related to the management of your employee benefits program. The coverage provides protection for management of the employee benefits related to: benefits counseling services, the interpretation of benefits, the handling of employee records, and the cancellation, termination, or enrollment of employee benefit plans.
Employee Benefits Coverage must be added on to your existing Business Liability insurance policy and costs will vary based on the number of employees and coverage limits required. The coverage will typically give an allotment per employee, as well as total for all claims made in a policy term.
Consider speaking to your general liability insurance provider to ensure you are fully covered.
Contact us today for a copy of your easy reference Plan Administrator Guide.