One provision within most, if not all, Group Benefit programs is the requirement for employees and their dependents to enrol within an allocated period of time. If enrolling outside that time frame, employees will be treated as Late Applicants and may experience limitations to their coverage.
What does “Late Applicant” mean?
An employee is considered to be a Late Applicant if they choose to enrol in a Benefit Program under the following conditions:
1.The employee applies for insurance for themselves or their dependents after 31 days of:
- the contract’s effective date
- becoming eligible
- comparable coverage ending under another plan (such as a spouse’s plan)
- getting married, becoming common law or having a child
2.The employee re-applies for insurance after it had earlier been cancelled (such as in a leave of absence).
3. The employee previously refused coverage or was declined coverage under a previous group plan.
4. The employee applies for coverage and their spouse’s plan has not been terminated.
5. The plan administrator does not enrol the employee on the plan within the waiting period or the subsequent 31 day grace period.
Why does the provision exist?
If employees were given the option to join the plan at any time, they may only join when they need to submit a claim. As a result, there would be more claims and fewer insurance premiums available to pay them. The imbalance may cause higher insurance rates or bankruptcy and termination of the plan.
What must Late Applicants do to gain coverage?
When applying as a Late Applicant, most insurance companies require that the worker provide Proof of Insurability for themselves and their dependents. The proof would be at the employee’s expense and not the employer. What may be included is a Statement of Health and a Medical Examination.
What outcomes can occur?
The insurance provider has the authority to decide if they are willing to provide Extended Health Care and Dental benefits to the Late Applicant. If medical evidence indicates risk, coverage may be declined for all benefits. If coverage is granted, full payment of premiums is immediately required, and the employee will have coverage beginning from the date of approval.
However, dental coverage may be limited for the first year of coverage. Specific limitations vary with each benefit carrier, and are designed to prevent employees from enrolling to simply claim large dollar amounts.
Please contact us for further information.