Penalty Or Not

Bob_The_Insurance_Guy · 01-30-2009, 01:37 PM

I have a client who has a new employee. The group plan renewal is in March, but the new employee's waiting period is over in Feb.

They want to wait and put her on in March, letting her get STM until then. Any penalties for not putting her on in Feb. Its a small group of 10 employees.

moonlightandmargaritas · 01-30-2009, 01:59 PM

If she by some chance has a claim that would be covered on the group, but not the STM, that could open up a big can of potential litigation worms!

LGilmore · 01-30-2009, 06:06 PM

If the person is a good health risk, it could lower their renewal. I've done this before, likewise when a bad risk is leaving just prior to renewal. Let the rep know if it works in the group's favor.

The risk the group runs is what moon mentions. The litigation would be between the employer and employee. The insurance company is not responsible for the employer failing to enroll an eligible employee.

ABC · 02-02-2009, 10:30 AM

They should put the employee on after the waiting period.
I don't think you are breaking any rules but I would check with the insurance company to see if they address this issue in the master contract.

The person should not effect the renewal because its so close to the renewal date. Most of the renewals I see are generated 90 days prior to renewal.