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8 important lessons for employees about benefits plans

 

BY Bill Zolis, The Callery Group | September 16, 2013

The signs of a new school year are all around us. Neighbourhood streets are once again lined with yellow buses, store shelves are packed with school supplies, and backpacks are being filled with homework assignments. (Don’t let your kids convince you otherwise.)

They can all serve as gentle reminders to schedule an annual employee training session about your client’s company benefits plan.

There is always important information to cover during these regular meetings with a benefits consultant. After all, a benefits package or the process used to file related claims can evolve over time, and there is a value in reminding employees about the steps they can take to sustain plans for years to come.

Consider these tips and topics that employers often ask me to share during annual 45-minute presentations:

  1. Eligibility 101 – Every individual benefits plan will identify when new employees begin to enjoy coverage, and this usually occurs after a probationary period comes to an end. But it is not the only way timelines can play a role in benefits. An employee’s spouse may not be covered until the couple has shared a permanent residence and a common mailing address. Meanwhile, unmarried children may see benefits come to an end once they turn 22, while full-time students in the family will see the support stop once they turn 25. Of course, the exception to the rule will include disabled children who are still considered dependents.
  2. Time management – Limits on payable benefits can be based on annual terms or calendar years, and plan holders need to understand the difference if they want to avoid denied claims or unexpected invoices. For example, a dental plan may limit expenses in a calendar year while a vision plan bases its cap on a moving 24-month window. Employees also have no more than 30 days to report “life events” such as the need to cover a spouse who lost their job and the benefits that came with it. Any delays can require plan holders to submit new medical evidence, potentially increasing premiums or affecting available coverage.
  3. The math of aging – Some benefits such as Long-Term Disability coverage are eliminated altogether after employees reach a traditional retirement age of 65. This might be a shock to older employees who have decided to delay retirement and stay on the job.
  4. Introduction to taxation – The only certain things in life are death and taxes, but employees may be interested to know that paid benefits for death, dismemberment and critical illness are tax-free income. The same is true for dependent life insurance, which can be a valuable resource to help survivors pay for funeral expenses. It is an important fact to include in any family’s financial planning exercise.
  5. Advanced sustainability – Every employee will appreciate the support of a benefits plan, but they also have a role to play in the plan’s ongoing sustainability. Those who commit to using a pre-approved pharmacy, discourage non-essential dental procedures, or ask their physicians about generic prescription drugs and other affordable alternatives will reduce the strain on this valuable resource.
  6. Introduction to personal finances – An increasing number of benefits plans rely on employees to pay a portion of drug costs, but there are steps plan holders can take to reduce the amount drawn from their own pockets. In addition to embracing generic medication, which can be 45% cheaper than a brand name alternative, employees can also choose to fill just a 10-day supply of a new drug to ensure that it works before buying (and discarding) a full prescription.
  7. Business economics – Many employees are shocked to learn just how much employers invest into benefits plans. This understanding can be a powerful retention tool, helping to build morale and making valued employees think twice before exploring other job offers.
  8. Homework – Any error in the forms used to submit expenses can lead to delayed or denied claims. The timing of the paperwork can be equally important. Those who are thinking about dental expenses valued above a certain threshold, for example, may need to submit a pre-determination form to have the expense pre-approved. Any emerging medical conditions also need to be compared to the restrictions on available travel insurance.

This article first appeared on the Callery Group blog.

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