Employer provided life insurance plans have a lot of benefits. You enjoy reduced premiums. There isn’t any need to fret over timely premium payments because they are generally subtracted from the paycheck. You get help from the employer’s benefits or Human Resources departments. You can easily decrease or increase coverage. There is open enrollment, and more.
However, there are also disadvantages to it, such as less control. If you leave the job, your life insurance policy terminates with it. Therefore, it is crucial to act swiftly and evaluate the options available to you so you can make sure your coverage does not end. Unless certain steps are taken to port or convert the policy within a particular timeline, you may risk losing your coverage.
The majority of employer-provided insurance policies are governed by ERISA, a federal statute that imposes certain requirements on businesses and insurance providers. Insurers and employers are required under ERISA to:
- tell employees accurately about their insurance coverage;
- give employees an SPD (Summary Plan Description) detailing key provisions of the life insurance plan;
- operate in the employees' best interests;
- simple access to benefit help and plan documents;
- be careful and cautious while handling employee benefits.
ERISA After Changing Workplaces
While ERISA offers both employees and employers significant legal protections, these protections also involve certain obligations. When leaving your employment, you should be aware of the following obligations:
The insurance premium won't be paid to the insurance company after you quit your employment and stop getting paychecks. Your insurance will therefore end. Your employer is required to provide you with a letter outlining your alternatives and the date your insurance will terminate. According to federal courts, an employer is required to advise a leaving employee of their option to maintain or transfer group insurance. They are obligated to keep you informed regarding any coverage changes even if the information was not requested by you.
While your employer is required to inform you when your coverage ends, it is your responsibility to adhere to any porting or conversion deadlines. This information can be found in the Plan documentation that your employer/insurer is required to make available to you or a Notice to Convert from your employer. Typically, you have 31 to 60 days until the insurance coverage expires to submit the portability/conversion application. The application must be filled out exactly as instructed before being submitted to the insurance provider. To ensure that your coverage is maintained, you must also pay your premiums insurer on time.
If you have a delayed or denied life insurance claim or beneficiary dispute, our life insurance lawyers can help. We recently resolved denied $300,000 MetLife claim, and a $200,000 Prudential denied claim.