What happens if you miss the 31-day window?

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Oops! Did you miss the 31-day window to enrol? Don't worry, it happens to the best of us. This post will help guide you and we'll make sure you know exactly what to do to get things back on track. So, take a deep breath, and let's dive in!

What is a Late Applicant?

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A late applicant usually refers to a person (or people) who applies for group insurance coverage more than 31 days after their effective date. Late applicant status applies to not only employees but also their dependents.

For example, this could be an employee who's trying to enrol more than 31 days after their effective date. Or it might be a spouse trying to be added more than 31 days after the date they got legally married. You can learn more about the effective date for coverage in this article.

 

 

Why does this 31-day rule exist?

One of the great things about group benefits plans is that you don't have to worry about proving you're healthy enough for insurance, the only requirement is that you must be enrolled within 31 days of your effective date.

This smart approach safeguards the plan from adverse risks and keeps the likelihood of anti-selection low. If people could enrol at any time they wanted, they might just wait until they need some medical attention before they decide to buy insurance. It's a bit like not being able to buy car insurance to cover an accident that's already happened.

Without this strategy, we might end up with a group full of people with high claim amounts, which would mean that insurers would have to charge more to cover those claims. These high premiums would most likely deter healthy individuals from getting coverage. Plus, it could make offering a group benefits plan just too pricey and challenging for companies. And we wouldn't want that, would we?

 

What happens if you miss the 31-day window?

This is what you really came here for, right? Let's get to it!

As mentioned earlier, if an employee misses the 31-day window to enrol, add a dependent, or make a coverage change, they're considered a late applicant. But don't worry, they'll just need to provide some medical proof to show the insurance carrier they're in good health.

Being a late applicant doesn't stop them from enrolling or making changes, it just means a bit more paperwork that needs approval. It's a tiny bump on the road to getting them insured!

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If your employee happens to miss the enrolment window, don't panic. Here are the steps they can follow to get back on track:

  1. As a late applicant, they'll first need to complete a medical statement form, also known as an Evidence of Insurability form. This form provides proof of their health status and is a vital part of the late application process.
  2. Once the form is filled out, it needs to be submitted to the insurance carrier's medical underwriting team for evaluation. If the team requires more details or additional medical tests, they will reach out to the employee directly. However, any costs associated with these additional tests will be the employees’ responsibility.
  3. After a thorough review of their form and possibly additional tests, the underwriting team will make a decision. The outcome of this decision will be communicated directly to both you and the employee.
    • If their application is approved, they will be added to the plan from the date of approval. Please note that the coverage will not be backdated. Also, be aware that some carriers may impose a dental restriction for the first 12 months of an approved late applicant's coverage, which can range from $100 to $250. This is an important detail that should be communicated to the employee before they complete the health statement.
    • If their application is declined, unfortunately, the employee and any dependents will not be covered under the group plan. This will result in the exclusion of this part of their compensation package. This scenario really highlights the significance of diligent benefits administration, as it could potentially expose your organization to various liabilities.

The 31-day rule might seem a little strict, but it’s necessary to keep group benefits plans fair and affordable.

Late applicants might need to do some extra paperwork or possibly even some medical tests but luckily it's a fairly simple process aimed at getting your employees enrolled quickly. Staying on top of benefits management can help avoid late applicants and prevent problems in the future.

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