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![Refusal of Benefits
• Do not let employees refuse the ‘pooled benefits’
• Life, LTD, STD, CI, AD&D – anything other than health & dental
• Refusal of Benefits Forms / Waivers do not stand up in court
• Judge: “[Employer] ought to have known that the employee did not
understand what he was doing.”
• Case study: Hudson’s Bay Company (Dave Crisp, VP HR)
NSARGFeb2016](https://image.slidesharecdn.com/nsarg-beneplan-presentation-feb-18-2016-160219121237/75/NSARG-Presentation-The-Beneplan-Co-operative-February-18-2016-18-2048.jpg)
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NSARG Presentation - The Beneplan Co-operative - February 18, 2016
The Beneplan Co-operative's NSARG meeting on February 18, 2016, covered various topics related to employee benefits, including legal updates and strategies for negotiating premiums. Key takeaways emphasized the importance of notifying insurers about employees not actively at work, preventing refusals of pooled benefits, and proper handling of terminations and sick leave. Future trends discussed included the rise of medical marijuana coverage and the implications of new treatments on benefit sustainability.
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NSARG Presentation - The Beneplan Co-operative - February 18, 2016
- 1. The Beneplan Co-operative NSARGMeeting: February 18, 2016 February2016
- 2. Benefits Legal Update NSARGMeeting: February 18, 2016 February2016
- 3. Practical strategies usedby Fortune 500 companies NSARG Meeting: February 18, 2016 February2016 Negotiating Benefits Premiums with an Insurer
- 4. Benefits in theYear 2020 Future Trends & Projections NSARG Meeting: February 18, 2016 February2016
- 5. About Beneplan The BeneplanEmployee Benefits Co-operative February182016 All Rights Reserved
- 6. Mennonites February182016 The Original MutualInsurance Company
- 7. The Beneplan Co-operative • Member-owned co-operative • Mutual insurance society • Created for the purpose of leveraging volume to obtain lower fees on group benefits premiums • Owners are small & medium employers • Recovers excess profit from insurance companies & distributes it to members as patronage dividends Section-01
- 8. Benefits Legal Update NSARGMeeting: February 18, 2016 February2016
- 9. Common Reasons forDisputes • Termination while sick • Termination without proper notice period (benefits extension) • Moving carriers without Life & LTD Waivers • Partial disability & allowing sick employees to work • Late applicants • Independent contractors • Allowing refusal of benefits • Failing to report NAAW employees NSARGFeb2016
- 10. First: Think Likean Insurer • Understand the philosophy of underwriters. • They’re like bees: they’re more scared of you than you are of it. • Paranoia can actually guide some contracts & policies. • Group benefits contracts are for employees who are actively at work. • Why? And why do we care? • Anything that can go wrong, will. (LTD: Forget to increase salary; CPP offsets (over-insured LTD), etc NSARGFeb2016
- 11. First: Think Likean Insurer • Individual health insurance requires medical underwriting. • Group health insurance does not require medical underwriting! • You can have stage 4 cancer and still be put onto the plan. • The presumption is that you are actively at work. • If you’re well enough to work, you’re well enough for insurance w/o medical. • In order to allow this, they are scared of ‘antiselection’. • Antiselection is the practice of only buying insurance when you need it. NSARGFeb2016
- 12. February182016 “Hello, GEICO? I’dlike to buy home insurance now.”
- 13. Case Study: BramptonEmployer • 100 employees • 60 year old, loyal, long-standing employee • Wanted time off but used up all vacation • Controller gave him an ROE on Dec 1st so that he can claim EI instead of unpaid vacation • EE passed away on Dec 23rd • Insurer declined the claim: “Employee was not actively at work.” • Widow sued and was settled in pre-trail. NSARGFeb2016
- 14. Takeaway • Notify yourinsurer ASAP if you have an employee who will be not actively at work • Get a Letter of Agreement (LOA) on that specific time period to indicate coverage NSARGFeb2016
- 15. Independent Contractors • Donot add them to the plan • Let them buy their own coverage • Adding them can negate their status as independent contractors • You need to have 2 clients minimum to be a contractor – but insurance companies require that you are not working anywhere else to receive benefits. • Part-time, seasonal and non-permanent employees should never be covered. Why? To prevent abuse & premium increases. NSARGFeb2016
- 16. Independent Contractors • Surferin Hawaii: “I lay bricks in the summer just so that I can collect unemployment and surf all winter.” NSARGFeb2016
- 17.
- 18. Refusal of Benefits • Do not let employees refuse the ‘pooled benefits’ • Life, LTD, STD, CI, AD&D – anything other than health & dental • Refusal of Benefits Forms / Waivers do not stand up in court • Judge: “[Employer] ought to have known that the employee did not understand what he was doing.” • Case study: Hudson’s Bay Company (Dave Crisp, VP HR) NSARGFeb2016
- 19. Takeaway • Do notlet employees refuse the ‘pooled benefits’. • If they kick & scream, just pay the premiums on their behalf. • Don’t want to set a precedent, as it’s a slippery slope, but the alternate is much worse. • Require it just as you do uniforms or safety training. NSARGFeb2016
- 20. Late Applicants • Makethe benefits enrollment as part of the new hire package. • Do not forget to enrol an employee. • Chase the employee for their forms – don’t let them sit on them. • Why? Medical underwriting, possible declines, possible lawsuit. NSARGFeb2016
- 21. Terminations & SickEmployees • Never terminate an employee on sick leave. • Wait until they return to work or end the disability claim. • Never terminate their Life / LTD benefits while on sick leave. • The threshold to prove ‘job abandonment’ is extremely high. Must prove that the employee had a clear and explicit decision to abandon the job or not pursue the claim. NSARGFeb2016
- 22. Frustration of Contract • Questionable disabilities • Own occupation period ends • The employee refuses to return to work • The insurer refuses to continue to pay an employee who is not truly disabled • What do you do? NSARGFeb2016
- 23. Possible Choices • Waituntil they return to work, then terminate on Day 1 • Bring them back to work full time, allow them to perform or underperform, and terminate on that basis • Frustration of Contract (trick – ask an employment lawyer) NSARGFeb2016
- 24. What to dowith health & dental? • There are many cases of employees on LTD for several years, or even decades, and continue to obtain health & dental benefits. • Can cause significant damage to claims history and therefore, premiums. • Courts found it reasonable to terminate health & dental after 12-24 months on disability. NSARGFeb2016
- 25. Termination: Notice periods • In Ontario & Quebec, must extend benefits 1 week per year of service (max 8 weeks) as part of the notice period. • Federally regulated employees have a similar requirement. • Common law can be greater: can be months instead of weeks. • Without a clear termination clause in the contract, it defaults to common law. • Takeaway: Have your employment contracts reviewed by an employment lawyer, including the termination clause. • Can cost as little as $500, and worth every penny. NSARGFeb2016
- 26. Worst case scenario • Termination clause silent on benefits extension during notice period. • Employee is terminated and given 4 weeks benefits extension per ESA. • Employee diagnosed with cancer in week 5, applies for LTD and is declined. • Judge finds the employer responsible for failing to extend benefits during common law notice period of 3 months in this case. • Employer had to cough up the LTD money, and can be on the hook until the employee is 65 years of age. NSARGFeb2016
- 27. Moving carriers withoutWaivers • What is Waiver of Premium? • Life & LTD Waivers – why are they relevant? • Do not switch carriers until you have reported all NAAW employees, filled out waivers, and received approval for all waivers. NSARGFeb2016
- 28. Partial Disability • Casestudy: Promotional materials company. • CTO developed MS. • Company needed him to keep working, and he wanted to keep working – continued like this for 2 years. • MS is a progressive disease – starts slow and accelerates. • Partial disability vs total disability. • Carrier declined the claim on basis he is not totally disabled. • He has not lost income – remember, LTD is an income replacement insurance, not pure sickness insurance (such as Critical Illness). NSARGFeb2016
- 29. Negotiating Benefits Premiumswith an Insurer Practical strategies used by Fortune 500 companies NSARG Meeting: February 18, 2016 February2016
- 30. Our industry isthe only one where you can give a vendor $500,000, and are prevented by law by proving to you where it went! (Privacy) February2016
- 31. 1. Volume =Clout
- 32. 1.a) Fees, Trend/Inflation,Reserves
- 33. 1.b) Target LossRatio: Over 80%
- 34. 1.c) Fair IBNR/ Reserve is 5%
- 35. 1.d) Fair Trendis 6% on Dental; 12% on Health
- 36. 1.e) Broker Commissions:1% to 12%!
- 37.
- 38. 2.a) Fully Insuredvs ASO
- 39.
- 40. 2.c) Life Insurance& LTD Refunds
- 41.
- 42. 3.) Rebates fromBig Pharma
- 43. 3.) Rebates fromBig Pharma
- 44. 4.) Synchronize withGovernment Subsidy Programs
- 45. 4.a) EI PremiumReduction Program
- 48. 4.b) Supplementary Unemployment BenefitPrograms (SUB) – ‘top-ups’.
- 49. 4.c) Ontario TrilliumDrug Program (Oral Chemotherapy)
- 50. 5) Plan DesignCustomization - Trim the Fat
- 51. 5.a) Dental billingcodes – eliminate loopholes
- 52. 5.b) Paramedical fraud– crack down
- 54. 5.c) Multi-tiered drugformularies
- 55.
- 56. Benefits in theYear 2020 Future Trends & Projections NSARG Meeting: February 18, 2016 February2016
- 57. Medical Marijuana Tax-deductible As soonas a DIN is assigned, get ready to start covering medical marijuana
- 58. Truvada – PreventativeHIV Treatments Used off-label to prevent HIV infection Clients should ask carriers if drugs like these will be on prior authorization, and further, will they ask if the member has already been infected?
- 59. Paramedical Fraud Continuing Whatdoes this mean about sustainability of benefit plans?
- 60. Prediction for 2020:Botox Claims on the Rise – Dentistry Administering Botox “80% of my law school friends have already gotten Botox at age 30.”
- 61. Pharmacogenetics “The right drug,at the right dose, at the right time.”
- 62. Thank you. The BeneplanCo-operative Yafa Sakkejha 1.800.387.1670 x252 Cell 416.702.9232 Fax 416.863.5157 yafa@beneplan.ca