Changing Insurers or Claims Administrators (Benefit Tips ® - © 1999)

Confirmation of Coverage

Don't cancel your existing coverage until you receive written confirmation by the new insurance company and you are sure that they have the details of all employees not actively at work.


Continuation of Coverage

Ensure that the new insurer will honour the continuation of benefits for leaves of absence, severance periods and survivors. Legislation exits in most provinces that stipulate that no employee may lose coverage solely as a result of a change in insurer.

The new insurer must not reduce existing volumes of life and disability insurance below the lesser of the prior coverage or the new schedule of insurance.

The suicide and pre-existing condition clauses must consider time served under the prior policy and new policy.


Notice of Claims

Advise your staff of the change in coverage and facilitate the submission of claims. Most polices require that claims be submitted no later than 90 days following the termination of the policy. Provide your existing carrier with a listing of all disabled employee and review their disability claim and waiver of life insurance premium claim.


Disabled Employees

Disabled employees should apply for a waiver of their life insurance premium with the insurer that provided coverage when they became disabled. This should be done as soon as they believe that their claim will satisfy the waiting period (usually four to six months), but no later than the last day of coverage by that insurer.


Integrity of Claim Maximums

Provide the new claims administrator with details on orthodontic dental claims to preserve the claim information needed to adjudicate the lifetime maximum. The annual deductible is often waived for the first partial calendar year in order to avoid the administration of entering claims information from the prior carrier.

The annual maximums and frequency limitations start over on the effective date of the new policy. This can significantly increase claim costs when changing claim administrators.