Watch Out for Deadlines and Document Traps in Benefits Enrollment and Administration

By Wanda Bishop

Employers face all kinds of timelines and deadlines when employees are hired or terminate. Benefits administration adds another set of complications.

Wanda Bishop

All benefit plans – health, dental, vision, life, disability – specify a waiting period for eligibility. Under the Affordable Care Act, the waiting period for health insurance can’t be longer than 90 days.

You, as the employer, are responsible for notifying the new employee once they meet their waiting period so they can elect or waive coverage. All full-time eligible employees must have the opportunity. Typically, employees have 30 days from their eligibility date to make their selections and enroll in coverage.

Trouble starts when either you or the employee miss a deadline and the employee shows up in an emergency room without coverage. To avoid liability, you must be able to prove that your full time eligible employee was informed of his enrollment rights and provided the opportunity to enroll timely.

If there’s no documentation to show a timely enrollment opportunity was offered to the employee, it’s your word against his. And if you have 50 or more eligible employees, you’ll also face an ACA penalty for no offer of coverage to an eligible employee.

The employee loses also. Not only will he lack the health coverage he needs but he will also have to pay a tax penalty for failing to maintain coverage each month. That part of the Affordable Care Act is still in place.

This is why an online enrollment system is so valuable, beyond the time and cost it saves. A Human Capital Management (HCM) system will keep up with hire dates and alert employers when an employee has met the required waiting periods. It will allow employees an online portal to view benefit plans and make elections timely and efficiently. And it will provide the employer with a complete audit of timelines and offerings to confirm they are meeting their notification requirement. Without that, you’ll have to document every step in a manual process. It’s hard to do that flawlessly in a busy HR office.

Terminations involve another set of obligations and deadlines. We’ve already talked about COBRA notifications. You also have to notify your insurance carrier when an employee terminates. You have 30 days in which to do so.

Suppose you miss that deadline and 60 to 90 days go by and you notice that terminated employee is still appearing on your carrier billing invoice. When you finally do notify the carrier, typically the carrier will only terminate coverage 30 days retroactively. And since the employee is no longer receiving a paycheck to cover his portion of the premiums, you’ll have to pay the employee’s share of premiums, too.

An HCM system will help prevent these problems also. When you enter the termination, it will generate reminders to be sure to terminate coverage with carriers and remind you to issue COBRA notices to meet the required deadlines.

Savers Admin’s Advanced HR system fulfills all these requirements and more. It automates the notices you have to send, it makes sure they’re timely and it creates a record of proof. And soon Advanced HR will implement carrier feeds that will provide a direct connection to your insurance carrier, to make your job simpler still. A carrier feed will send enrollments, terminations, and changes directly to your carrier so those updates can be made immediately. And you can mark that task off your to-do list.

To learn more about systems that can save you time and keep you compliant, give us a call at 800-949-0311. We’re here to help!

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Read our full July 2018 issue of The Administrator newsletter.