Important Things to Know When You Have More Than One Insurance Provider for Your Benefits Plan

Jul 29, 2015

It’s not uncommon to have more than one insurance carrier within an employee benefits program. This arrangement can be beneficial in many ways – often including better coverage provisions, technology, and/or pricing. However, there are several administrative implications to be cognizant of when electing to have multiple carriers. These include the following:

  • Maintaining consistent, accurate employee information within all programs. It is critically important to ensure that all eligible employees are listed with all insurers and that their information, such as salary, dependent(s) and beneficiary is consistent amongst all plans. Ideally, this should be reviewed quarterly.
  • Aligning definitions and coverage provisions across all policies. Some key provisions to watch for include: definition of earnings, definition of disability, waiting period, pre-existing conditions, and termination age. Make sure they all match up.
  • Managing waiver of premium claims and approvals. It is crucial that these are carefully and consistently managed across all programs. In a program where the long-term disability and life carriers differ, it is important to ensure that claims are filed, and approvals are checked with all carriers should an employee become disabled.
  • Survivor benefits are implemented should an employee pass away. This applies if the carrier for the extended health and dental is different from the life insurance carrier. In the event of an employee’s death, it is important to ensure that survivor benefits are in effect for extended health and dental, if the employee has a surviving spouse or dependents.
  • Eligible claims under all programs are all filed and paid by each carrier. Again, if the life and AD&D carriers differ, be mindful of the rightful benefits in an event of an employee’s death. For example, if the death was the result of an accident, the beneficiary is entitled to claim the benefits from both the life insurance and AD&D.

As you can see, there are some good reasons to consider multiple providers within a benefits program. However, in exchange for some of those valuable enhancements, some important administrative responsibilities exist. It is vital to take into account all of this information before making a decision to split benefits.


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