Group Benefits: Liabilities and Solutions. Presented by: Jeannette Massicotte, Senior Account Manager Brenda Cubbon, Benefits Administrator

Transcription

1 Group Benefits: Liabilities and Solutions Presented by: Jeannette Massicotte, Senior Account Manager Brenda Cubbon, Benefits Administrator

2 Introduction o Jeannette: Joined Wiegers Financial & Benefits in May 2009 Has worked in the financial services industry since 2003 Works primarily alongside Deb Wiegers

3 Introduction o Brenda: Joined Wiegers Financial & Benefits in December 2007 Works primarily alongside Andrea Hansen

4 Before We Get Started New company name: Wiegers Financial & Benefits New address (as of October 1 st ): rd Street East Saskatoon, SK S7K 0S2 New website: wiegers.ca

5

6 Fine Print Liabilities: The Enrolment Process Every group plan has a defined eligibility waiting period for group benefits (e.g. 3 months of active and permanent employment) An eligible employee and his or her dependents must be enrolled on the group plan no later than 31 days after the employee s eligibility date Otherwise, the employee and his or her dependents will be treated as late applicants

7 Fine Print Liabilities: The Enrolment Process What is a late applicant? o A late applicant must include a completed health questionnaire (at minimum) with his or her enrolment form o If the questionnaire raises any red flags about the applicant s health, the group insurance carrier has the option to disallow the applicant from joining the group plan Is a potential liability to your company

8 Fine Print Liabilities: The Enrolment Process o If the employee is allowed on the plan, he or she will likely have reduced Dental coverage (i.e. $100 or $250) the first year on the plan Is another potential liability to your company

9 Fine Print Liabilities: The Enrolment Process o Why do insurance carriers care about late applicants? Anti-selection! o Why should you care about late applicants? Anti-selection! Is why participation in the plan should be mandatory (if not already stipulated as such by your group insurance carrier)

10 Fine Print Liabilities: The Enrolment Process o Remember to also provide each eligible employee with an employee booklet when joining the plan o It is up to you to update an employee s family status (i.e. new spouse or child) o Update employee salaries to ensure benefit volume is current o Always check your billing carefully for irregularities that will prevent errors and billing issues

11

12 Fine Print Liabilities: Maximum Benefits o What is a non-evidence maximum (NEM) benefit? The maximum benefit to which an employee is entitled, regardless of his or her health Depends on the employee s gross annual income Applies to the income-based benefits only, i.e. o Life Insurance o Short-Term Disability Insurance o Long-Term Disability Insurance

13 Fine Print Liabilities: Maximum Benefits o What is an overall maximum benefit? The total maximum benefit that is available to an employee Typically includes an NEM plus a top-up o The NEM is still (as always) guaranteed o An employee must apply and be medically approved for the top-up

14 Fine Print Liabilities: Maximum Benefits Top-Up (proof of health required) Overall Maximum Benefit Non-Evidence Maximum (no proof of health required)

15 Do You Know Your Group s NEMs and Overall Maximum Benefits? Liability: 1. You do not advise employees of their option to apply for top-up Life, Short- and/or Long-Term Disability insurance 2. You do not immediately advise your group insurance carrier of every employee salary update o An employee dies or becomes disabled o In part because you did not advise the employee of the option to apply for more insurance and/or did not advise your carrier of salary updates, a lesser benefit is payable than what might have been payable had the employee applied and been approved for the top-up

16 Do You Know Your Group s NEMs and Overall Maximum Benefits? Liability solution: o Signed Decline to Apply letter (when a particular employee s salary entitles him or her to apply for a top-up)

17 Sample Decline to Apply Letter Company Name Re: Group Benefits Please accept this letter as acknowledgement of the following: I understand that I am eligible to apply for additional Life, Short-Term Disability and/or Long-Term Disability insurance than what is automatically provided through Company Name s group benefits plan, given that: These are income-based benefits and My income exceeds a certain level that is of relevance to the group plan. I understand also that should I choose to apply, Insurance Carrier will ask me questions about my health and can deny me the additional coverage if it considers me an unacceptable insurance risk. I will, however, maintain the coverage that is automatically provided regardless of the state of my health. I have decided against applying for the additional coverage but understand that I can apply at any time while still employed with Company Name and so long as I still qualify to do so. If I decide later to apply for the coverage, it will be wholly my responsibilityto initiate and follow through with the steps required to do so. Employee s Name (Please Print) Employee s Signature Employer s Signature Date

18 Life Insurance

19 Fine Print Liabilities: Life Insurance o Life Insurance Conversion Privilege An employee has the option to convert his or her group life insurance to a personal insurance policy after leaving your company (for any reason) As long as the employee does this within 31 days of leaving, he or she does not have to provide proof of health The cost and type of life insurance will differ from what is available through the group plan but the coverage is guaranteed

20 Fine Print Liabilities: Life Insurance o Life Insurance Conversion Privilege Liability: o Your company does not advise a soon-to-be or now-former employee of this option o It is now longer than 31 days since the employee left the your company and because of the employee s health, he or she cannot get personal life insurance o The employee argues that your company bears some responsibility for failing to advise him or her of the Life Insurance Conversion Privilege option

21 Fine Print Liabilities: Life Insurance o It s also a good idea to remind your employees to regularly review their Life Insurance beneficiary designations In the event of a life change (e.g. marriage, divorce, children, etc.), they might want to update their beneficiary designations through the group plan Employee will have to complete a Change Form

22 Fine Print Liabilities: Dependent Life Insurance o Dependents (like employees) have 31 days to join a group plan following their eligibility date Liability: you do not advise employees that within 31 days of their getting married or having a new baby, they must enroll their new dependent(s) on the group plan or face late applicant status

23 Fine Print Liabilities: Extended Healthcare and Dental Benefits o Waiver of Extended Healthcare and/or Dental An employee can only waive one or both of these benefits if he or she has coverage under a spouse s group benefits plan o Example: Jill has Extended Healthcare coverage under her husband s group plan so she can, if she chooses, waive Extended Healthcare coverage under her own plan o She must, however, enroll her husband and her for her company s Dental benefits All Life insurance (including Dependent Life) and Disability insurance benefits are mandatory o An employee must enroll for family coverage even if waiving both Extended Healthcare and Dental

24 Fine Print Liabilities: Extended Healthcare and Dental Benefits o Waiver of Extended Healthcare and/or Dental If an employee loses spousal coverage, the employee has 31 days to join his or her own plan before being considered a late applicant Example: o Jill s husband decides to resign from his place of employment effective July 1 st, thereby losing his and her group Extended Healthcare benefit o Jill has until July 31 st to enroll both her husband and herself for Extended Healthcare through her own group plan o If she waits any longer, they will both be considered late applicants with respect to the Extended Healthcare benefit

25 Fine Print Liabilities: Extended Healthcare and Dental Benefits o Waiver of Extended Healthcare and/or Dental Liability: you do not advise employees that within 31 days of losing their spousal coverage, they and their dependent(s) must enroll on the group plan or be treated as late applicants

26 Sample Policy Manual Insert

27 Fine Print Liabilities: Survivor Benefits o Most group benefit plans include Extended Healthcare and Dental survivor benefits o Typically one or two years duration o Liability: You do not inform your deceased employee s dependents that they qualify for survivor benefits o Liability solution: Advise Wiegers Financial & Benefits of any death claim

28 The Special Support Program (SSP) o Is a provincial initiative aimed at partially or wholly subsidizing prescription drug costs for eligible citizens o Covers prescription drugs listed on the Saskatchewan Formulary drug plan Currently includes approximately 4,250 prescription drugs o A person s eligibility is based on a number of factors including: Combined family income Prescription drug costs over previous six months Number of dependents Other government coverage available

29 The Special Support Program (SSP) o Every Saskatchewan citizen can and should apply, regardless of current need It can take several months for the government to process an application A person s prescription drug needs and expenses can change instantly Applies to every member of a family

30 The Special Support Program (SSP) o What does the SSP have to do with your group benefits plan? Most group insurance carriers will suspend paying an employee s or dependent s prescription drug claims once they reach a certain level (e.g. $750 in a year) These employees are typically sent a letter instructing them to apply to the SSP The employees must submit proof to their group insurance carrier of their application to the SSP before the carrier will resume paying claims o Is a positive thing with respect to your group plan! The group insurance carrier will then reimburse all or a portion of whatever is not covered under the SSP

31 The Special Support Program (SSP) o Remember: The SSP only covers prescription drugs included in the Saskatchewan Formulary drug plan o If your group plan includes coverage under a more comprehensive drug plan (e.g. the Prescription Drug Plan), it will continue to cover these drugs SSP reimbursement levels vary from person to person, depending on eligibility

32 Benefits and Maternity Leaves

33 Benefits and Maternity Leaves o An employee who is about to go on maternity leave has the option to continue or discontinue her group benefits for the duration of her leave o She must make her decision prior to starting her leave o Whatever she decides, ask that she sign a letter that clearly indicates her decision Advise your group insurance carrier

34 Benefits and Maternity Leaves o If the employee decides to discontinue her benefits, she loses all coverage until she resumes working at the expiration of her leave o No waiting period is required upon her return to work

35 Benefits and Maternity Leaves o If the employee decides to continue her benefits: She will be covered for all benefits for the duration of her maternity leave o If she becomes disabled while on leave and remains disabled at the end of her leave, she will qualify for disability insurance benefits on her intended returnto-work date (assuming she meets the group plan s definition of disability) o She will continue collecting disability benefits until she can resume working

36 Benefits and Maternity Leaves o For example: Emma decided prior to beginning her maternity leave that she wants to continue her group benefits throughout Her leave began on January 1, 2012 and is scheduled to end on December 31, 2012 She is involved in a collision during her maternity leave that leaves her disabled with a severely broken leg Effective January 1, 2013 Emma will begin collecting group disability insurance benefits Her benefits will continue until she can return to work (assuming she meets the group plan s definition of disability)

37 Benefits and Maternity Leaves o What about her group insurance premiums? In the interest of practicing non-discrimination, Wiegers Financial & Benefits recommends that you continue the same cost share arrangement during her leave as before her leave Collect from her either a full year s worth of premium payments or a sufficient number of post-dated cheques prior to her beginning her leave o The letter you require her to sign should indicate that if she fails to provide payment or her cheques are not honoured, she will have two weeks (or whatever length of time your company decides is appropriate) to arrange payment or her benefits will be terminated immediately

38 The Extension of Extended Healthcare and Dental Benefits to Disabled Employees o Disabled employees will collect disability benefits for as long as they meet their insurance carrier s definition of disability o While on Short-Term Disability claim, disabled employees are required to continue paying all Life and Disability insurance premiums (including Short-Term Disability) o While on Long-Term Disability claim, both Short- and Long-Term Disability premiums are waived o Life insurance might continue too: Life insurance waiver of premium

39 The Extension of Extended Healthcare and Dental Benefits to Disabled Employees o Most employees assume that if they go on disability claim, they will continue to have Extended Healthcare and Dental coverage o but o Extended Healthcare and Dental benefits are not guaranteed to disabled employees

40 The Extension of Extended Healthcare and Dental Benefits to Disabled Employees o Wiegers Financial & Benefits recommends that your company implement a policy that clearly stipulates the length of time a disabled employee can continue to have group Health and Dental benefits Typically, one or two years

41 The Extension of Extended Healthcare and Dental Benefits to Disabled Employees o Why? You want to help your disabled employees but Disabled employees are often high claimers o This could negatively impact the insurance rates that your entire team must pay, potentially until the disabled employee turns 65 years of age Insurance carriers sometimes frown on quoting on groups with disabled employees o Could be a problem if you want to change carriers

42 The Extension of Extended Healthcare and Dental Benefits to Disabled Employees o Why not simply terminate a disabled employee from the Extended Healthcare and Dental benefits if/when the employee s claims become problematic? Risk of being perceived as discriminatory o A better idea is to implement a company-wide policy procedure before any employees become disabled

43 Other Reminders Re: Disability Claims o Make sure you know the proper procedure for an employee going on a disability (e.g. which forms must be completed and where to send them) o Get Wiegers Financial & Benefits involved if you have issues or need help with an appeal o Even if the injury happened at work, it might be worthwhile applying through the group plan

44 For Your Information: The EI Premium Reduction Program o Is a provincial initiative that allows employers to pay EI premiums at a reduced rate if their employees are covered by a group Short-Term Disability insurance plan o An employer must return a portion of its savings to employees: Cash rebate (taxable income) Paying for new or enhanced group benefits Employee functions o You needn t reapply each year; your entitlement will continue until you change or cancel your approved plan

45 For Your Information: Coverage for Post- Secondary Students o Children who are over the age of 21 and attending a postsecondary education institution on a full-time basis generally qualify to remain as dependents on their parents group benefits plans Typically until the age of 25 o Most group insurance carriers automatically terminate dependents when they turn 21 years of age unless notified of their student status

46 For Your Information: Coverage for Post- Secondary Students o Check with your insurance carrier to find out what is required under your plan but typically: Proof of student status, e.g. tuition statement Sometimes, only a phone call o At the age of 25, dependent status usually terminates Health and Dental conversion options available

47 For Your Information: Coverage for Post- Secondary Students o If a dependent child must pay premiums for coverage through school, can usually waive this coverage (and required insurance premiums) in lieu of dependent coverage under parent s plan Coverage is often better under parent s plan Doesn t cost anything extra if the parent would have family coverage anyway Is usually a very small window of opportunity at start of school year to waive coverage under school plan

48 For Your Information: Termination of Employee From Plan o Remove employees from your company s benefits plan as soon as their employment terminates Can be done online or in hardcopy but ensure it gets done promptly to avoid: o Paying premiums for a terminated employee o The employee utilizing the plan past his or her termination date as these claims will impact the claims experience and, by extension, future insurance rates for your group as a whole o Could be irreversibly costly if you don t!

49 Out of Country Health Coverage o Advise your employees to let the insurance company know if they are leaving the country There may be restrictions on coverage due to recent health issues or drug changes o Some countries require proof of health coverage upon entry (e.g. Cuba)

50

51