Why is it Important to Enroll Employees on a Timely Basis?

Apr 27, 2015

When an employee is hired by a company and meets the eligibility requirements of the benefits plan, the plan administrator has 31 days to enroll the employee on the plan.

Employee enrolment within this time frame is crucial because the applicant will be accepted by the insurance carrier without any medical underwriting or the need to submit evidence of insurability. In other words, the applicant is covered for all the benefits regardless of their current health status.

If an employee misses this window of opportunity, they will be considered a late applicant, which will require them to submit proof of good health. If their health is deemed poor, they may be denied enrolment for all the benefits in the plan. If they are accepted, they will have dental limits in the first year, usually between $150 – $250, depending on the insurance carrier. The dental limits affect the employees and their dependents.

Some employees may choose to waive coverage for the extended health and dental benefits because they have spousal coverage. Often times, these employees are not enrolled for any benefit coverage, because they assume that they do not need to complete an enrolment form since they have opted out of these two benefits. That is not the case; they still need to complete an enrolment form to enroll for the pooled mandatory benefits, such as group life, AD&D, long-term disability, and dependent life (if it is offered).

It is in the interest of both the employer and the employee to ensure that proper plan administration be set in place when new hires join the company. Certainly the employer does not want to deliver the bad news that the employee is denied coverage for any of the benefits especially coverage for catastrophic claims.

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