Group health insurance is usually provided by companies as a benefit of employment to employees. Depending on the company, the employees may pay a discounted rate for their insurance or get health insurance completely free of cost from their employer.
After opting for group health insurance, companies and employers can have several questions about how to navigate the bureaucracy relating to insurance. One of the commonly asked questions is how to add or delete an employee from the group health insurance policy.
In this article, we’ll cover everything you need to know about adding and deleting employees along with certain rules that you need to be aware of.
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Addition and Deletion of Employees in Group Health Insurance
An employee is provided with group health insurance from the first day of the job.
There is no limit to the number of times an employer can add or remove employees from the group health insurance policy. Hence, an employer with a significant turnover of employees can still avail of the maximum benefits of group health insurance. They can even make changes to the list multiple times within the space of one year.
As soon as a new employee joins the organization or an employee leaves the organization, the question of how to make the relevant changes to the group health insurance policy will arise.
How to Add Employees to Group Health Insurance Plan?
Usually, for a group health insurance plan, a dedicated relationship manager is assigned to the employer. This relationship manager is the point of contact between the employer and the insurance company. If an addition has to be made to the group health insurance policy, the relationship manager can be contacted who will facilitate the change.
Further, nowadays, insurance companies provide mobile apps which can be used for several purposes including the addition or subtraction of employees in the case of group health insurance.
The employer can simply log in to the app and submit the relevant request. The insurance company will take care of the rest.
The addition of a new employee to an existing health insurance policy is done through a process called “endorsement”. An endorsement is just an additional agreement that functions along with the existing agreement. This endorsement will contain the details of the new employee and will evidence the fact that they are now covered by the insurance policy.
After the endorsement has been made, the relevant premium amount will be debited from the cash deposit account held by the employer for the sake of insurance. We’ll cover the cash deposit account later in this article.
How to Remove Employees in Group Health Insurance Plan?
In case an employee leaves the organization or needs to be deleted from the group policy for any reason, the process that needs to be followed is similar to that of adding an employee.
The employer can contact the relationship manager of their insurance account and ask the relationship to facilitate the subtraction of the employee. The details of the concerned will need to be deleted from the records of the insurance company. Further, the relevant agreement between the employee and the insurance company will need to be terminated. Lastly, any premium which needs to be refunded to the employer will be refunded. All of these tasks are undertaken by the relationship manager at the request of the employer.
Further, if the insurance company has a mobile app that can be used for such a purpose, then the employer can simply submit a request for the deletion of the employee through the app. The insurance company will take care of the rest.
Any remaining balance or premium will be credited to the cash deposit account.
What is a Cash Deposit Account?
A cash deposit account is similar to any bank account. However, a cash deposit account does not bear any interest. A cash deposit account is maintained by the employer in favor of the insurance company.
Amounts can be deducted from the cash deposit account by the insurance company depending on the terms of the insurance agreement entered into between the insurance company and the employer.
If a new employee needs to be added to the group policy, the relevant premium will be deducted from the cash deposit account. If an existing employee needs to be deleted from the group policy, then the relevant premium will be refunded to the cash deposit account by the insurance company.
The cash deposit account helps to facilitate the quick transfer of cash between the insurance company and the policyholder (the employer).
Wrapping Up
The addition or subtraction of an employee from a group insurance policy is no longer a cumbersome task. Thanks to recent innovations in technology and administrative procedure, such tasks only take a few hours.
