As a Plan Administrator, it is important to understand the difference between a Mandatory and Non-Mandatory plan and how it affects your group benefits plan.
Mandatory Plan
A mandatory plan requires 100% participation from members and their eligible dependents; no member or eligible dependent is able to waive coverage unless they have similar health and dental benefit coverage with another carrier.
- If your plan has mandatory participation, GroupHEALTH may have more flexibility when it comes to processing enrollments or changes that were reported late, or correcting Administrator errors or oversights.
- If an application is not received within the timeline set out by the insurer (most insurers use 31 days), coverage may still be enacted within 12 months provided back premiums are paid. Having this flexibility within the first 12 months avoids the need to have late enrollments submit Evidence of Insurability (which means coverage is subject to approval from the insurer).
- Your GroupHEALTH representative should be contacted prior to offering your members any solutions or options.
Non-Mandatory Plan
A non-mandatory plan must have a certain level of participation in order to remain in effect. If you do not meet these contractual minimums your plan will be terminated.
- With non-mandatory plans, if an administrative error is made or an enrollment/change is submitted outside the timeline set out by the insurer (most insurers use 31 days), the insurer will not correct the error or accept the change without Evidence of Insurability
- The insurer has the right to refuse coverage upon reviewing Evidence of Insurability
Potential Liability with a Non-Mandatory Plan
If you allow a member to refuse coverage and that member later incurs large expenses or losses that would have been covered by the benefits plan, they may try to hold you, the employer, liable.
If you encounter a member who wants to refuse coverage, the best response is that the plan is a condition of employment (mandatory).
If you choose to make your plan non-mandatory, you have a legal obligation to inform members of the basic details of the benefits coverage available to them, the timelines for applying and the consequences of applying late.
Summary – All Plans
All eligible members and dependents must be enrolled in your group benefits plan when they become eligible for coverage.
Members do not have the option to join the plan whenever they wish. With respect to when someone is being added to the plan, there are two options when adding a member to a plan. Apply the waiting period in full, or advise your representative that the waiting period is to be waived as a condition of employment. Note: For waiving the waiting period, this must be reported to us within 31 days of the Employees employment date.
Please refer to your Handbook under Eligibility.
Members that are covered under their spouse’s plan, may choose to waive their Extended Health and Dental benefits.
If the member is waiving the health and dental portion, it is important they indicate on their application that there us alternate coverage, with who, and the policy.
However, it is important to note that the Member and all Eligible Dependents are required to be added to the Plan for all Core benefits
You can refer to the definition of the Dependent of Spouse outlined in your Benefits Handbook (Booklet).
Your Booklet can be found in WEBS on the far left hand side Menu.
To proceed with a non-mandatory plan:
- Reach out to your GroupHEALTH Representative to discuss
- Plan Sponsor must complete and sign “Non-Mandatory Benefit Plan Sign-Off” form
- Members must complete a “Complete Waiver of Benefit Coverage” form
- Forward completed forms to GroupHEALTH Benefit Solutions
- Retain a copy of the form for your records