When it comes to Employee Benefits

Knowing the DO’s and DON’T’s can save you time, money, and frustration. We’ve also included some FYI’s (For Your Information) to help you better understand your options.

The Do's and Don'ts

Of Employee Benefits

DO – Employee Terminations

If you are initiating a termination, please make sure that you use the “government legislated notice date” if this date is different than their last day worked when reporting to the carrier to terminate benefits.

DO – Maternity Leave

Who pays for the premium and when? If an individual elects to maintain their benefit plan while-on maternity leave then benefits must be extended during this period and the share cost agreement must continue as it was.

We do not recommend employees terminate their Long Term Disability (LTD) benefits during their maternity leave. Doing so leaves the employee unprotected and forces them to satisfy a new pre-existing condition clause upon their return.

If the employee wishes to proceed without LTD during their maternity leave, we recommend the employer has them sign a letter confirming they are aware of the risks.

DO – Salary Changes + Evidence Forms – Complete Annually!

A standard procedure should be set for reporting salary changes as Life Insurance, AD&D, Disability and/or Critical Illness Benefits may all be affected.

There are three standard choices:

On the effective date of the salary increase when the advisor is completing the group benefits renewal with you OR The beginning or end of the year.

Otherwise, if a claim is submitted, the employee may not receive the full benefit they are entitled to according to their current salary.

The employer should get a signed acknowledgment from the employee indicating the evidence form was provided to them.

The employee file should indicate they were given the form to increase their coverage to the maximum provided under the contract based on their current salary.

It is the employees’ choice to submit the evidence if they wish to apply for this additional coverage but the employer should be protected by having proof they gave the form to the employee.

DO – Students studying outside of Canada

Students studying outside of Canada NEED to apply for extended travel insurance and OHIP also needs to give an extension as well.

DO – Late Applicants – Employee and Family

The carrier must be notified within 30 days of any “material change” in coverage. This applies to ALL, the employee, spouse and dependents. Contact Lori at Continuum II if you have questions about this important detail.

New additions to the family should be communicated to the carrier within 30 days.
Late applicants are medically underwritten and can be declined all together due to poor health.

A late applicant, if approved, could have as little as $100 of dental benefits for the first 12 months with some carriers.

DO – Employee Terminations

Employees have 30 days to convert their Life Insurance and/or Long Term Disability (if applicable) to an individual plan. Each carrier has a process in place which is included in the carriers Plan Administrators Guide. This guide will tell you where to direct the employee if they are interested in converting their group coverage to personal coverage.

We suggest the administrator have the employee sign a waiver indicating the conversion option has been offered to them. This signed form should be kept in the employees personnel file for future reference.

It is also possible for a terminated employee to convert to individual health and dental plan without evidence. The benefits must be converted within 60 days of termination. Most carriers offer an individual plan and the employee can generally apply on-line for continued coverage under an individual plan for all members who were covered under their group plan.

DON’T – You Cannot Simply Extend Benefits

Before you make an offer to extend benefits to an employee leaving your company beyond the government legislated notice date, you need to ask the carrier for approval prior to granting an extension. A severance or lay off must be approved by the carrier to establish the length of time AND the benefits that can be extended.

Carriers will typically grant an extension for three months excluding LTD and out of country travel, but it is also possible they may decline the request completely. Premiums remain the employer’s responsibility.

Never include an offer/incentive of extended benefits as part of a termination clause in employment contracts without getting the carriers approval first. Keep in mind the approval process could take up to five working days to be reviewed and approved.

DON’T – Consultants or Contractors

Consultants and/or contractors will not be eligible for Long Term Disability (LTD), and typically will have a flat Life Insurance benefit amount.


FYI – Benefits and Long Term Disability (LTD)

How long you pay for health and dental benefits while someone is off on LTD is up to the company but here are some things to consider:

Seek legal counsel and implement a corporate standard. Be aware the court usually sides with the employee.

The typical term would be the equivalent of two years.

The corporate standard must be in place prior to any claim.

The corporate standard needs to be communicated to all employees.

We suggest that all companies have an Employee Handbook that states the particulars for LTD and other benefits.

FYI – Minimum Number of Working Hours

A full-time employee must work the minimum amount of hours per week, every week, as outlined in the benefits booklet.

The typical minimum amount of hours is 24 hours a week but this amount could be reduced or increased based on your needs.

FYI – Employee Health Suggestions

Consider speaking to a Massage Therapist in your area who would agree to come to the office for a 10 minute free massage for employees.

If your carrier does not have an Employee Assistance Program, consider investing in this.
Most carriers charge between $3.33 and $4.00 per employee per month and this coverage gives the employee a variety of counseling sessions to help them in their busy life.

Have you signed up for one of our Health and Wellness sessions with our staff member Taylor Gray, Registered Holistic Nutritionist? If not, talk to us to set one up for your employees. Taylor’s sessions are free and are a great resource for your employees. Most carriers also have a wellness site that employees can access on-line as part of their benefits.