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When does a terminated employees coverage end?

When an employee terminates mid-month coverage will generally last through the end of the month. For plans that were set up with a non-traditional effective date, a plan that was originally effective on the 15th of the month for example, coverage will last through the end of that billing period.

The last date of employment is important when the insurance carrier or broker is assisting in processing a termination. The last date of employment will help to determine when the first date of no coverage is for the employee in question.

The date coverage ends for a terminated employee can vary carrier to carrier, we always recommend checking with your broker to make sure your plan follows the above guidelines.


When can I add dependents to my plan and what is a Qualifying Event?

If enrolled in a group sponsored insurance plan you may hear your HR or benefits department say that you need to have a qualifying event to make changes to your plan, including adding or removing a spouse or child(ren) from your plan.

Qualifying events can include:

  • Marriage
  • Divorce
  • Birth
  • Death
  • Change in insurance status (loss of coverage under a spouse, for example)
  • Change in job status (moving part time to full time, for example)

When a qualifying event (QE) occurs, your have 30 days to notify your employer and make necessary changes to your plan.

The need to have a QE to make changes to your plan stems from how premiums are withheld from your paycheck. Many employers utilize a Premium Only Plan (POP)/Section 125 plan to withhold premiums. A Section 125 plan helps to lower the employee’s taxable income but comes with some restrictions, the need for QE’s in order to make plan changes is one of those restrictions.

What is Open Enrollment?

Open Enrollment, sometimes interchangeably used with the term Annual Enrollment, is the time of year when you can freely make changes to your insurance plans. Open/Annual Enrollment occurs both for individuals plans and plans sponsored by employers. This article addresses Open Enrollment for employer sponsored insurance plans.

Open Enrollment usually occurs 11 months from your original effective date with any changes made taking place 12 months from your original effective date. For example, if you plan was originally effective July 1, then open enrollment would occur each year in June. There are ways to change your open enrollment period, but this is not common practice.

Several months before your open enrollment period your broker will strategize with you and review your options for benefits in the coming year. This is the time that you will learn if your carriers are increasing or decreasing rates and is also the time that your broker should be quoting your coverage to be sure you are still offering the best option for your employees.

Open Enrollment is the time of year that any benefit eligible employee can elect, drop, or make changes to their plan without a qualifying event. This is the last time for the next 12 months that an employee may make changes without a qualifying event.

How does my broker get paid?

Offering employer sponsored and voluntary insurance programs to your employees should not be confusing or complicated. Many employers use a broker to help select, enroll, and manage benefit programs. Choosing the right broker is a crucial step in building the right benefits package for your company.

Brokers are paid a commission by the insurance carrier and many insurance carriers will only offer coverage through a broker. Commission fees from the carrier can be paid as a per employee per month fee or a percentage of the total monthly premium based on enrollment. While the way the carrier pays the broker may vary, employers will not pay a fee directly to their broker.

While commission is paid from the insurance carrier, some brokers will charge a fee for additional services such as enrollment platforms, HR systems, and certain compliance documents.

When is a new hire eligible for benefits?

Waiting periods will vary from company to company but a few of the most common waiting periods are:

  • First of the month following date of hire
  • 1st of the month following 30 days of employment
  • 1st of the month following 60 days of employment

Employers usually define waiting periods with benefit carriers when benefits are established. Waiting periods can be amended at renewal but most often will stay the same.

When selecting a waiting period, an employer will want to consider things such as employee retention, and new hire probation periods. Many employers use benefits to attract top talent, this will play a big role in the length of your waiting period. If you are in a competitive industry, a shorter waiting period may help to better attract top talent.

Why should I offer group health insurance to my employees?

We understand that owning and running a business is a lot of work. Not only are you dealing with daily operations, but also trying to attract and retain staff can be a challenge. In addition, workplace safety and employee wellness should be a top priority for any company looking to be competitive and progressive in their industry.

Not long ago, unless you were a large, expensive conglomerate, you may not be thinking too much about investing in health insurance. However, with our everchanging marketplace, low unemployment rates, and flexibility in remote work, employers are aiming to attract the best workforce possible. One of the best ways to do this is by putting a focus on employee benefits. There are several advantages to this, which we will explore below.

Investing in your workforce shows that you are not a taskmaster who only focuses on high sales figures. Although those things are highly important, it will not help your brand or image in the long run. As a small to medium sized business, news travels fast around business networks, and you want to have a positive impact on potential customers, partners, and future job applicants.

In addition to keeping a positive brand image and attracting top talent, there are legal advantages and requirements for some employers to offer a qualified health plan. As your company grows and expands, you may be legally required under the Affordable Care Act to provide a form of an affordable health plan to your eligible staff.

Finally, having a healthy staff is a huge long-term benefit to any organization. If your employees have access to coverage, they are more likely to seek care in the event of an illness or accident. Seeking treatment earlier has proven to show less absenteeism, and better recovery rates. An employee without coverage however can cause an organization to seek a replacement candidate, spending countless hours and expenses trying to fill that employee’s position, wasting many resources over time.

Strategic Benefit Partners specializes in helping small to medium sized businesses in finding affordable options that fit both the employer and employee’s needs and budget. We want to help you boost your company’s credibility, brand, and appeal.

How many employees do I need to employ before I can offer benefits?

From small business to large business, offering employee benefits to retain the top talent is important! But how small is too small to write group benefits for your company

Most carriers consider a business for group coverage when you have at least 2 total eligible employees, including the owner. In most cases the two people must be either an owner or a W2 employee. Carriers will require proof of an employer/employee relationship such as a wage and tax report, or an operating agreement listing the names of the owner(s).