As an employer, ensuring the membership and data for your Employee Benefits is up to date is crucial for cost management. Failing to regularly review and update your benefits membership can result in unnecessary expenses, especially if you continue paying for employees who have already left your organisation.
When employees leave the company, their Employee Benefits coverage should cease accordingly (particularly for Healthcare policies such as Private Medical Insurance and Health Cash Plans). A few insurers offer the option to backdate the cancellation of their benefits coverage, which allows employers to align their policy leave date enrolment with the date of the employee's departure.
It's important to note though that the ability to backdate leaving dates varies among insurers. While some insurers are flexible and allow backdating for a few months, others have stricter policies that limit backdating to a shorter timeframe, typically only 30 days.
Actionable Steps for Employers:
To avoid paying for employees who have left the business, employers should implement the following steps:
Employers must ensure that their employee benefits membership remains up to date to avoid unnecessary expenses associated with paying for departed employees. If in doubt, you should work closely with your Employee Benefits Consultant who may be able to provide regular reminders or provide you with regular membership lists, so the audits can be undertaken easily.