Terminating Your Employees

Have more questions? Submit a request

Handling employee departures and leaves of absence is a key part of managing benefits in every workplace.

In this post, we'll chat about why it's so important to process employee departures quickly and let carriers know about leaves of absence. We're also going to dig into how benefits continue during statutory notice periods in Canada, and the different options employees have when they're leaving the plan.

Processing employee terminations

Documents OG.png

Plan administrators should always handle terminations on the carrier portal as soon as possible. This is important for a couple of reasons:

  1. It prevents your company from being billed for someone who's no longer on the team.
  2. It keeps the individual who's left from submitting any claims they're no longer entitled to.

Failure to terminate an employee can lead to an increase in claims, negatively affecting your group's experience. Also, keep in mind that credits for any terminations that might have slipped through the cracks can only be backdated up to 3 months, and that's only if no claims were submitted by the individual after their termination date.

Terminating an employee with future timesheets submitted

When an employee is terminated, any future timesheets they’ve already submitted, whether approved or still pending, will be removed from HR & Payroll.

However, there's one exception to this rule.

If a terminated employee has submitted a timesheet for a future period in a payroll that’s already been completed and is locked, there are steps to follow based on your unique scenario. Click here to learn more. 


Notifying your carrier of Leaves of Absence

Informing your carrier about any leaves of absence is also very important. You should also email your Benefits Experience Manager at Humi to let them know when an employee is taking a leave of absence. They'll happily guide you through the next steps and let you know what's okay and what might need further approval from the insurance carrier.

Account Invite OG_02.png

Details to include in your email

In your email to Humi, please share the following details about the employee on leave:

  • This includes the type of leave
  • Their last day at work
  • When they're expected to return
  • If their benefits will keep running during their time off

Depending on the nature of the leave, some benefits might legally have to continue, while others might need the carrier's approval to be extended during the leave.


Severance Packages

If you're thinking about offering a severance package to a departing employee, which might include benefits for a certain period, it's essential to know that all insurance carriers require approval. However, this doesn't apply to benefits that continue during their statutory notice period in the event of involuntary termination.

Take, for example, an employee in Ontario who's been with you for two years. They're legally entitled to a 2-week statutory notice period, and their benefits should continue during this time. If you're considering extending any benefits beyond this period, you'd need to get the carrier's approval.

Here in Canada, the rules around benefits continuation can vary depending on the employee's home province and their tenure with your company. So it's a good idea to check out your province’s ESA website for the specifics, or maybe have a chat with an employment/labour lawyer to get a clearer picture of your obligations.

And remember, your Benefits Experience Manager at Humi is always ready to help coordinate the approval for extending benefits, just email us here.


Conversion of Benefits

Benfits Icons.png

Upon exiting the plan, employees have the option to transfer their benefits into an individual policy with the carrier. The best part? There's no need to submit a medical form.

Initiation of this process usually needs to take place within 31 days. Most carriers reach out by call or email (if contact details are available) to guide individuals through the conversion process.

Update their email

Just a little tip before you process the termination on the carrier's portal - make sure to update their email to a personal one. This ensures they won't miss any important information about their conversion options.

Handling employee terminations and leaves of absence efficiently is super important, both for financial and compliance reasons. That's where plan administrators come in - they're key in ensuring a smooth transition for departing employees while staying on top of legal requirements and carrier protocols.

By fully understanding the ins and outs of benefits continuation, notification processes, and conversion options, you can navigate these aspects like a pro and keep your benefits administration system running flawlessly.

Was this article helpful?
1 out of 1 found this helpful