A benefits plan administrator plays an important role in ensuring an organization remains contract compliant and avoids potential liability. Whether you're new to employee benefits administration or just need a refresher on the tasks an administrator is responsible for, we've got you covered.
But first, what exactly is a plan administrator?
What is a Benefits Plan Administrator?
Put simply, a benefits plan administrator is a representative that is responsible for managing the employee benefit plan on behalf of the company. This means making sure members complete their enrollment, providing education on the benefits included in the plan, and keeping all employee data up-to-date when any changes occur.
Now we can take a more in-depth look at the most important tasks of a plan administrator.
Top Ten Tasks of a Benefits Plan Administrator
1. New Employee Enrollments
Any new eligible employees should be added to the benefits plan and have their enrollment complete within 31 days of satisfying their waiting period (if applicable) to avoid becoming a late applicant. If an employee's waiting period is being waived, they must enroll within 31 days of their hire date. It is important to emphasize that members need to enroll themselves and all eligible dependents regardless onto the plan even if they plan to waive health and/or dental coverage because they have coverage under another group plan (e.g. spouse's plan).
2. Life Events
Whenever an employee experiences a life event, it is important to notify the insurance carrier in a timely manner to determine any eligibility changes. A life event can include: a change in marital status (marriage, divorce, common-law partnership), adding an underage dependent (natural birth, step-child, adopting, becoming a legal guardian), or losing Health and Dental coverage with a spouse's plan.
Important Terms to Know:
Waiting Period: the length of time an employee has to be with the company before they can enroll in the benefits plan.
Employee Eligibility: the plan contract and design overview indicate the minimum number of hours an employee is required to work before they are eligible to enroll in the plan.
Dependent Eligibility: not all benefits plans include coverage for employees and their dependents. The plan contract will outline dependent eligibility if applicable.
Common-Law Partner: a couple that has lived together for at least one year in a conjugal relationship as defined by the rules of the Government of Canada.
3. Employee Status Change
If an employee has a change in status that impacts their benefits eligibility, notify the insurance carrier immediately to get the employee enrolled in the plan.
For example: Company ABC requires that employees work a minimum of 32 hours to be eligible for their benefits plan.
Michael started out at Company ABC as a part-time employee working 20 hours per week, which made him ineligible for the benefits plan.
Michael later received a promotion at Company ABC to a full-time position working 37.5 hours per week. With this promotion, he is now eligible for the benefits plan.
The benefits plan administrator at Company ABC must reach out to their insurer to get Michael added to the plan, then have Michael enroll.
Whether an employee is let go from the company or chooses to move on themselves, they must be removed from the benefits plan immediately (unless benefits continuation is established, see below) to prevent them from taking advantage of the plan.
5. Benefits Continuation
Depending on the circumstances of an employee's departure, an employer may wish to continue an employee's benefits for a certain period of time. If that is the case, the plan administrator should reach out to the insurer immediately to determine eligibility to do so.
6. Plan Communication
Let your members know of any changes to the benefits plan to avoid confusion. This could include:
Member eligibility changes
Dependent eligibility changes
7. Claim Process
Educate employees on how to submit claims to the insurer. Some important things to consider are:
Does the insurer use mail-in claim forms?
Can members submit claims electronically?
Is there a mobile app that can be used to submit claims?
Does the insurer offer direct payments for health, dental, and drug purchases or does the member have to pay out-of-pocket then submit a claim for reimbursement?
How do employees access their drug card? Is it a wallet card, or is it digital?
Who should members reach out to with questions about a claim?
8. Report Accurate Earnings
The insurer should be notified as soon as any change to an employee's salary or hourly wage occurs. For plans with critical illness, short-term disability, or long-term disability benefits this is especially important because with a wage increase the employee could qualify for a higher non-evidence maximum.
9. Review Premium Statements
You will receive monthly statements that outline premium amounts, enrollments, terminations, rate changes, and other information. Review these statements to ensure that any changes that happened during the period are captured accurately.
10. Employees Nearing Retirement
As employees reach the traditional retirement age, dependent on the carrier, benefits coverage may be reduced or terminated. As a plan admin, it is your responsibility to know the retirement age set by your insurer (if any) and communicate coverage changes to employees nearing the age.
Long Term Disability: Typically terminates at age 65 (or earlier retirement). Premiums are automatically discontinued by the carrier approximately four months prior to reaching age 65.
Life Insurance and AD&D: Typically Life and AD&D premiums decrease by 50% at age 65 (with a maximum benefit) and terminate at a specified age (age 65-75 is common)
As a benefits plan administrator, it is your job to keep employees informed about the details of their benefits plan. This includes but is not limited to; getting new employees enrolled, reporting on any updates to life events, earnings, coverage eligibility, and retirement, and ensuring monthly premium statements are accurate. Each of these tasks plays an important role in maintaining contract compliance and avoiding legal liability.
Are you an administrator for a group with Simply Benefits? Download our Top 10 Tasks Guide!
Simply Benefits is Canada's newest 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 enableBenefits Advisorsto digitally manage all client plans online,Employersto efficiently administer employee coverage, andEmployeesto view, update and use their benefits 24/7 via desktop or smartphone app.
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