Talking About Financial Matters That Affect You and Your Organization
Does It Really Matter If I'm Late?
Dec 4th, 2015
Most group insurance providers require that employees and eligible dependents enroll with the group insurance plan within 31 days of becoming eligible. The purpose of this limitation is to reduce advise risk within the plan from plan members who choose to enroll only when they have a need for services (and therefore claim much more than the average current member which drives up pricing for everyone). Plan member who fail to enroll within the eligibility period will face late applicant status which may result in a limitation of coverage and/or an outright decline of coverage based on the medical underwriting that can be required.
It is a plan sponsor’s responsibility to enroll eligible members in a timely fashion to avoid late applicant status. Plan sponsor who fail to manage this risk may face legal issues should an eligible plan member fail to be enrolled due to administrator error. Plan member who choose not to enroll must either complete a waiver form (releasing plan sponsor of liability) or face the late applicant status at future enrollment.
Sometimes accidents happen, and providers reserve the right to waive late applicant status should a plan sponsor agree to enroll a plan member retroactively back to the eligibility date with payment of past premiums. This is not a guarantee, but plan sponsors should approach their advisor/broker for assistance.