Went on an appointment this morning to a business where I know the owner casually. He is a fine man, with a lot of financial resources who believes in doing things the right way.
I met with his human resources person and came to find out that he has around 40 employees with only 15 participating. The current agent put them with a major carrier only three years ago and I'm almost 100% certain there was no way in hell they could have had even close to 75% participation at the time.
Here is my dilema. Should I talk to the owner and tell him what risk he is facing should the insurance company do an audit? Normally, I just mind my own business when I run into these situations, but I'm sure this owner would not knowingly try to screw the insurance company. Plus, he has the financial resources to offer his employees more incentive to participate in order to get him in compliance.
Am I way off base in thinking about talking to him or should I just my my own business and go my own way? Thanks for helping a newbie out.,
"Am I way off base in thinking about talking to him or should I just my my own business and go my own way? Thanks for helping a newbie out.,"
Yes, and no. You need to look at the master contract and see if there are excluded classes or hours requirements for eligebility. There are many factors that come into play considering eligibility.
You also could have a lazy assed HR person who simply hasn't bothered to enroll people...be aware it isn't always the agent that F'd up. Also be aware if it's the HR that is responsible better know how to deal with it dipolmatically.
You should ask to look deeper before you make any assumption or accusations. That's the professional way to go about it.
We had a similar situation from a longtime client who has a business of about 80 employees and only the 7 managers are enrolled in the group plan....he wasn't sure if his agent skirted around the participation requriement somehow. He wanted to make us the agent of record, but we told him he might be better off letting sleeping dogs lie so the carrier doesn't take a second look at the policy, ask for a new wage and tax report, and cancel it. Sucks....would've been a nice commission too, but at least they know the risks involved. Not much other choice though.
Find out if they are working over 30 hours, etc. to see if they need to be included or not. If he's at risk, tell him so. You need to do what's best for the client, and you would want to know if it was you. No reason for him to come back later and ask why you didn't see the problem when you looked at his situation.
Wow, I'm not a compliance nazi at all. Matter of fact I run into this pretty dang often and usually mind my own business. This time I know the owner and don't think he wants to absorb the risk he has, "if" I'm right.
Do you write a lot of business without proper participation being met? The tone of your reply indicates that may very well be so.
I've run into a few situations were the owner was paying for individual plans for his employees which of course is an insurance violation in MD. I simply move on.
------------------------------------ Health Insurance Agents: Training, Support, Discounts, E&O for $440 www.ihiaa.com
"Do you write a lot of business without proper participation being met? The tone of your reply indicates that may very well be so."
Again this is your inexperience showing. You can exclude by class, contract, hours, time employed and so on......
You can have groups where only a handful of employees meet eligebility requirements and many don't. That fact alone doesn't make anyone unethcial or dishonest. Most employers require a certain amount of time served and hours on average before they offer benefits..don't confuse that for being a bad person.
I understand what you and Somarco both are saying. My broker with 30 years of experience has explained most of the exceptions to me. I'm still going to run my concern by him upon his return from town.
Perhaps my post was unclear. I don't have all the details yet, but on the surface this seems like a bad situation for my friend. I'll dig more and if I'm wrong I will back off. If I'm right, I will exclude myself and my company, from becoming his agent to prevent any wrongful perceptions.
I'm here to be fair to the current agent and the owner. I see no problem, however, of wanting to protect a friend. It is the only right and ethical thing to do. My post was just to get ideas in case this turns out to be a worst case scenerio.
Come back when you have more info. As I said, it could be alot of things including the HR. Tread carefully.
Nothing worse than having to go to the president of a company and explaining how he now has a 36 million dollar liabillity because his HR was a lazy ass. Being right isn't always what it's cracked up to be. The HR didn't get fired, but wasn't my "buddy" anymore either.
So check everything, frame your questions in such a way as not to accuse anybody. Write them down before you ask them and see how they sound. Good luck.
Carriers routinely ask for updated payroll reports and check them against eligibility requirements. This is especially true where enrollment has dropped in the plan. I had a few small cases cancelled last year due to drops in enrollment that were cross-checked against payroll reports.
Carriers are audited by the DOI and they must have their ducks in a row on participation, etc or else they get fined.
Since the owner of the business is a friend of yours, IMO, if you have all the facts and he then appears to have exposure there is a duty to apprise him of the situation without being accusatory. What he does about it is up to him.
Guys I have no intention of going off half-cocked here. Rest assured my intentions are good. I'm not out to hurt an agent, created needless problems for anyone etc. etc.
As a matter of fact, I hope I'm wrong, but as of this moment. It doesn't pass the smell test.
Ethical Dilema, What Would You Do?
Linear Mode
