Follow These Rules to Avoid Late Applicant Status for Group Insurance

Cindy Danielson

By Cindy Danielson

July 28, 2022

Group Insurance has lots of rules and things to remember. The employer's Plan Administrator is an employee's best resource. An important contractual rule is that employees need to enroll into their group benefits plan within 31 days of eligibility to avoid becoming a Late Applicant. This blog explains what Late Applicant status is, including how and why you will want to avoid it.

Before we jump into what a Late Applicant is, let's explain why it exists in the first place!

Why is there Late Applicant Status?

Insurance companies need to ensure that employees (and their dependents) aren't just enrolling into their plan when they need coverage. This requires that insurance premiums cover all employees (no matter their health situation) to balance the overall cost of the plan. Employees that are lower claimants help balance the overall cost of higher claiming employees. While this may seem unfair to the healthy people, a change in health can happen at any time - even if you are 'healthy as a horse'. Insurance provides protection for the future you can't predict.

If employees only enrolled when they want or need coverage, then claims will skyrocket and so will premium costs which will hit our wallets and risk the long-term sustainability of the plan for employers and employees. It's predicted that in 2022, Employer-provided benefits will increase 7% so spreading costs across all employees and implementing cost saving strategies is critical to maintaining the benefits we value and enjoy.

What is a Late Applicant?

Employees (and dependents) that enroll into their group benefits plan after 31 days from their eligibility date is classified as a Late Applicant and will be required to provide Evidence if Insurability. 😱

For the lucky employees that do enroll into their plan within the first 31 days of their eligibility date, they will NOT be required to provide Evidence if Insurability (see more about this below). 😊

Eligibility Date (aka Benefits Effective Date)

The Eligibility Date, also known as the Benefits Effective Dateis when benefits start and employees can submit claims through the plan and be reimbursed for incurred expenses.

Here are some scenarios to better explain this important date:

  • New Hires: If an employer requires employees to wait 3-months before they are can start their benefits (eligibility date), then the employee must enroll into the plan within 31 days of their eligibility date. Here's an example:
    • Employment Hire Date:  June 1
    • Waiting Period:  3 months from Hire Date
    • Eligibility Date:  September 1 which is the date the employee can start benefits/submit claims after completing their 3-month waiting period.
    • Benefits Registration Deadline (to avoid Late Applicant Status):  October 1 which is 31 days from their September 1st Eligibility Date. If an employee enrolls for benefits after October 1st, then they will be a late applicant.
    • Important Note: Employees can enroll into their benefits plan earlier than their eligibility date (it's even preferable to reduce the chance of becoming a late applicant); however, the employee's benefits won't start until their waiting period is complete and their benefits are effective September 1st. 
  • New Spouse: An employee must enroll a new spouse (legal or common-law) into the plan within 31 days from the spouse's eligibility date. Here are two examples for legal marriage and common-law:
    • Date of Legal Marriage:  June 15
    • Waiting Period:  None
    • Eligibility Date:  June 15 which is the date the spouse can start benefits/submit claims
    • Benefits Registration Deadline (to avoid Late Applicant Status):  July 15 which is 31 days from their June 15th marriage which is also their Benefits Eligibility Date. If the employee forgets to enroll their new spouse within 31 days of their legal marriage, then they will be a late applicant.
    • OR...
    • Date of Co-Habitation:  January 1, 2022
    • Waiting Period:  January 1, 2023 is common-law status* (12 months from the start date of co-habitation) *Simply Benefits deems common-law status after 12-months of co-habitation; however, this status may vary by insurer. Check with your Plan Administrator or Benefits Booklet.
    • Eligibility Date:  June 1, 2023
    • Benefits Registration Deadline (to avoid Late Applicant Status):  Feb 1, 2023 which is 31 days from January 1, 2023 common-law status which is also their Benefits Eligibility Date. 
  • New Child (birth or adoption): The employee must enroll their new child within 31 days of their birthdate/adoption date (eligibility date). Here's an example:  
    • Birthdate or Adoption Date:  October 1
    • Waiting Period:  None
    • Eligibility Date:  October 1 
    • Benefits Registration Deadline (to avoid Late Applicant Status):  October 31 

What Happens with Late Applicants?

This is the part you want to avoid as it's a risk and a hassle...

Late applicants will be required to provide Evidence of Insurability (requirements vary by insurer but may include medical questionnaires, blood tests, Physician reports, etc.) before they can enroll into the plan (the hassle) and there is no guarantee the application will be approved (the risk).

Coverage will not take effect until all required medical information is submitted to the insurer, reviewed, and written approval is received from the underwriters with an effective date of coverage determined by the insurer (not the original eligibility date). These approvals may be subject to limitations of coverage or a denial of certain coverage. If coverage is declined, the employee will receive a written notice/confidential letter with a detailed reason for the decline.

Back-Paying Premiums

Depending on the circumstance, an employer may be able to back-pay the premiums they would have otherwise paid if the employee enrolled on time. If back-payment is permitted by the Insurer, then Late Applicant status does not apply and the employee will not need to provide Evidence of Insurability. Employers should check with their Benefits Advisor and Insurer to understand the rules and restrictions with doing this.

Thinking of Waiving Benefits? You DO Still Need to Enroll

Even if you intend to waive health and dental benefits (because you don't think you need them or you have coverage through your spouse's plan - see Coordination of Benefits), you still need to enroll within the first 31 days of eligibility and select 'Waive' in the appropriate sections of the enrollment form. If you don't enroll/waive coverage, then the Late Applicant status still applies.

Important Note: Educate yourself on all the pro's, con's and considerations of waiving or 'opting-out' of health and dental benefits before making a decision you may regret. Read our blog: What Does 'Opting-Out' of Employee Benefits Mean to You?

Accountability & Liability

It is the responsibility of the company's Plan Administrator to enroll employees (and their dependents) on time to avoid late applicant status. However, it is also the responsibility of the employee to notify the Plan Administrator of any life changes (marriage, birth, adoption, etc.) Everyone needs to do their part to minimize the risk.

Final Thoughts

Avoid the risk (and hassle) of becoming a late applicant and simply enroll into the group insurance plan within 31 days of eligibility - you'll be happy you did! 

Questions?

This insurance stuff can be confusing so when in doubt, speak with your company's Plan Administrator or contact your insurance company. If your group insurance plan is with Simply Benefits, speak with our Support Team and they can answer your questions.

Reach out to Support

Disclaimer: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. If you are a Simply Benefits plan member, you can look up more information on your specific plan coverage under the “Plan Coverage” section on your account or Benefits Booklet, or speak to your Plan Administrator for more information. 

Other Helpful Employee Resources

About Simply Benefits

Simply Benefits is a Third Party Payor (TPP) that provides Employee Health Benefits 100% digitally through our Canadian Advisor partners. Our all-in-one digital solution provides three portals that enable Benefits Advisors to digitally manage all client plans online, Employers to efficiently administer employee coverage, and Employees to view, update and use their benefits 24/7 via desktop or smartphone app.

We help ENGAGE Employees Anytime, Anywhere, SIMPLIFY the Benefits Experience, and EVOLVE an Advisors’ Benefits Business.

Connect with us at simplybenefits.ca or on LinkedIn, Twitter, Facebook, Instagram, and YouTube.

Employee Benefits Made Simple. 

More Popular Posts...

Mandatory Employee Benefits in Canada

It's common for employers to provide full-time employees with a benefits package, known as employee...

Paige Latimer

By Paige Latimer

July 25, 2022

Changes to 2022 Maximum Insurable Earnings for Canadian Employment Insurance (EI)

Effective January 1, 2022, the Government of Canada announced some important changes to the maximum...

Cindy Danielson

By Cindy Danielson

December 14, 2021

A Guide to Taxable Benefits in Canada

Employee benefits can be broken down into two types: taxable and non-taxable - but what’s the...

Paige Latimer

By Paige Latimer

September 2, 2021

Want blogs delivered right to your inbox?

Subscribe to our Monthly Benefits Blast.

Simply Benefits Inc. (“us”, “we”, or “Simply Benefits”) is committed to privacy and the protection of your information. By using Simply Benefits’s website, mobile and other applications, and related Services made available through the Apple App Store, the Google PLAY Store, or otherwise on the Internet (together, the “Simply Benefits Applications” or “Applications”), you acknowledge that you accept the practices and policies outlined in this Privacy Policy (“Privacy Policy“). Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms set forth in the Terms of Service and which incorporate this Privacy Policy by reference.

At Simply Benefits Corp ("Simply Benefits") we are concerned with safeguarding and protecting the privacy of your personal information.

In accordance with Canada's *Personal Information Protection & Electronic Documents Act* ("PIPEDA") we have established policies on how we collect, use and protect any information that you give us when you use our website or services.

What We Collect

Required Regulatory Information

Simply Benefits collects information needed to provide services and meet the regulatory requirements of our industry. When you open an account or sign up for services, we collect personal information which may include but is not limited to the following:

  • Your name and date of birth

  • Contact details

  • Nature of your employment or business

  • Details about your dependents

  • Demographics

  • Other information relevant to the services we provide

Passive Data Collection

We may receive passively-collected information through a variety of methods, including “cookies” to collect information.

What is a cookie?

Cookies are text files containing small amounts of information which are downloaded to your device when you visit a website. Cookies are then sent back to the originating website on each subsequent visit, or to another website that recognizes that cookie. You can get more information about cookies here.

Simply Benefits uses cookies to track and measure site performance and gather analytics on usage. This information is anonymous and is only used by Simply Benefits to measure and improve our site.

When sending e-mail we may use tracking pixels and urls to help us measure open rates for e-mails and link clicks. This tracking information is used internally only to help us provide relevant content and is never shared with any third parties.

Opting Out of Cookies

If you choose, you may set your browser to notify you when you receive a cookie, giving you the chance to decide whether or not to accept it.

Analytics And Marketing

We use analytics tools and other third party technologies, such as Google Analytics, to collect non-personal information in the form of various usage and user metrics when you use our online Sites and/or Services.

We also use online advertising to reach new potential clients and remarketing tools that allow us to target ads to specific groups of people who have previously interacted with WealthBar’s websites.

Google allows individuals to opt out of it’s advertising cookies from its ad settings page.

Google has additional information available about their Remarketing Privacy Guidelines, and Restrictions.

Where do we store it

Simply Benefits may use third parties to store and process data. Simply Benefits will ensure that such third party service providers have significant expertise with data and digital privacy. Simply Benefits will ensure that personal data is stored and transmitted in encrypted format using technology such as SSL. Third party data storage and processing providers may be located in the United States and as a result personal information may be subject to U.S. privacy law which may differ from Canadian privacy law.

How We Use It

The information we collect is used so we can communicate with you, provide benefits and insurance management services, improve our products and services, and meet our regulatory obligations.

We share only the information which is reasonably required in the normal course of business with third parties such as our custodians, securities regulators, auditors, legal counsel, or law enforcement agencies, to enable them to fulfill their obligations to Simply Benefits and our clients. We may also disclose your personal information to third-party service providers, affiliates and agents in order to assist us in providing the services you requested and to fulfil the purposes for which your personal information has been collected. Outside of this we shall not sell, distribute or lease your personal information to third parties unless we have your permission or are required by law to do so.

How We Protect It

We are committed to ensuring that your information is secure. In order to prevent unauthorized access or disclosure, we have put in place suitable physical, electronic and managerial procedures to safeguard and secure the information we collect online. In the event that we share your personal information with third-party service providers, affiliates and agents, these parties will be required to adhere to strict confidentiality obligations and practices.

If you have a question, concern or complaint about our privacy policy, please send your comments and your contact details to our Privacy Officer in writing to the following address:

Simply Benefits Corp.

601-460 Doyle Ave,

Kelowna BC

V1Y 0C2

product@simplybenefits.ca

If you believe that any information we have on file for you is incorrect or incomplete, please write to or email us as soon as possible, at the above address. We will promptly correct any information found to be incorrect.