Eligibility and Enrolment
None of this is interesting until it costs someone a claim. Most of the genuine mistakes on small plans are eligibility mistakes, and nearly all of them are avoidable.
The terms
Eligible class
The defined group entitled to coverage — for example, all permanent full-time employees working a minimum of 24 hours per week. Classes can be split to give different benefit levels to different groups.
Classes must rest on objective criteria, not names or preference. A class built to advantage one individual will not survive scrutiny at claim.
Waiting period
Service required before coverage begins — commonly three months.
In a high-turnover business, genuine cost control. In a nine-person office, mostly administrative noise and a gap in a new hire’s first months.
Actively at work
A condition of coverage taking effect: the employee must be performing their duties on the date coverage or an increase would begin.
Why timing a plan change while someone is off sick is dangerous. Their increase may simply not take effect, and nobody notices until a claim.
Late applicant
Someone enrolling after their eligibility window closes — typically subject to medical evidence, and often restricted on dental for a period.
Enrolment deadlines are worth policing. A member who declines and later wants in has genuinely lost something, and the employer is usually blamed for it.
Participation requirement
The minimum share of eligible employees who must enrol. Where the employer pays the premium, participation is normally mandatory and 100%.
Watch waivers. Employees declining because of spousal coverage are usually permitted; too many waivers on any other basis can breach the contract and jeopardise the plan.
Dependant definition
Spouse, and children to a stated age — commonly 21, extended to around 25 for full-time students, and indefinitely for a disabled child.
Student status usually needs annual recertification. A missed recertification means a nineteen-year-old’s claims are declined.
Contractors and part-time staff
Contract workers are ordinarily not eligible under a group contract, which insures employees. Part-time eligibility turns on the minimum-hours definition in the contract.
Enrolling an ineligible person is worse than not enrolling them: premium is collected, everyone believes coverage exists, and the claim is denied. Verify eligibility before adding anyone.
Termination age
The age coverage ends — historically 65, increasingly 70 or on retirement.
With people working later, an employer with a hard 65 termination on life and LTD has an exposure they have almost certainly never considered.
Continuation during leave
Whether and how coverage continues during parental leave, disability or a temporary layoff, and who pays the premium.
Statutory leave rules and contract rules are not the same thing. Check both before stopping remittance for someone on leave.
Beneficiary designation
The person nominated to receive a death benefit, recorded on the member’s enrolment form.
Stale designations are endemic and consequential — a death benefit paid to an ex-spouse is unrecoverable. A beneficiary refresh is a low-effort, high-value exercise on any plan that has not done one in years.