Employer communication with the terminated employee regarding their coverage (continuation or cancellation) is critical and is detailed in this article.
Let's start with a quick review of how and when to terminate an employee (voluntary or involuntary) in the benefitbay platform.
Terminating an Employee - Process
- As soon as you know that someone is going to leave your company, you should put that termination information into benefitbay immediately. That way, benefitbay can dispute any payments that come through the ARC after their final premium payment has been made.
- Reminder: Here is the linked article about Terminating and Reverting Employee(s)
- The more difficult situation is if an employee’s premium payment has cleared ARC for the following month after they have left employment with you. In that case, benefitbay usually cannot dispute the premium that has been paid for the following month. The only way you will get refunded is by deducting the full amount of that month’s premium from the employee’s final paycheck. The carrier won’t refund you because the policy is owned by the employee.
Here’s an example: An employee gives you notice on 3/28 that he is leaving the company immediately. His April premium cleared his ARC account on 3/25. The only way you can collect his share of the April premium is by withholding those funds from his final paycheck.
If this employee’s April premium payment clears ARC on 3/29, we can dispute the payment and send it back, but only if you’ve gone into the benefitbay platform and put in the termination information (benefitbay has a 48-hour window to dispute payments). If you waited until 4/2 to put in the termination information, benefitbay would not be able to send the payment back because it’s been more than 48 hours since 3/29 payment.
BOTTOM LINE: Please make sure you enter termination information as soon as you know an employee is leaving.
Now, let's talk about email communication to the Terminated Employee.
Terminated Employee - Email Communication
- Once the termination is final and the employee is no longer with the company, benefitbay will send an email (assuming we have their personal email address) to the employee letting them know they can either keep the insurance and change their method of payment or they can cancel their insurance (example of our email below).
- Benefitbay also recommends that you also inform the employee of these options as part of your off-boarding process. We have found that employees are more likely to take action when they receive the information directly from your company. You can edit this email so that it’s coming from you; as well as make any changes to the email itself.
Subject: Change in coverage - ACTION REQUIRED!
Hello <Employee Name>,
We hope this message finds you well. We were notified about a change in your employment status at <Company Name>. Your medical coverage is fully transportable. You currently have two options regarding your ICHRA health insurance policy. It is important to take action as soon as possible!
Option 1: Keep Your INDIVIDUAL Health Insurance Policy
- Please sign in to your insurance carrier account or call the number on the back of your insurance card and update your payment method.
- Remove the benefitbay® ARC account information AND replace it with a personal payment method.
- Important to Note: Failure to make medical premium payments may negatively affect your ability to secure coverage in the future.
- Ensure that your new payment method is set to autopay to avoid any missed payments.
Option 2: Cancel Your INDIVIDUAL Health Insurance Policy
- Please call the number on the back of your insurance card to contact your insurance carrier directly to cancel your individual policy.
- Please note that this will result in the loss of your health insurance coverage.
- This option may be suitable if you have enrolled in a new employer’s plan or will be covered under someone else’s policy as a dependent.
- Important: If you do not cancel your policy, be aware that your insurance carrier may continue to bill you. Failure to make payments could lead to your account being sent to a collection agency, which may adversely affect your credit score.
If you have any questions, need assistance, or believe this email was sent in error, please do not hesitate to contact benefitbay® Customer Support at support@benefitbay.com.
Thank you for your prompt attention to this matter.