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The Hidden Liabilities of Your Employee Benefits Plan

A benefits plan should about be exactly that – benefits – not worries about liabilities. But no plan is 100% waterproof, and no benefits plan is 100% liability-proof.

While no plan is perfect, there are ways of mitigating potential liabilities to make sure your company, and your employees, get the most out of your employee benefits plan. If you haven’t thought about the possibilities of hidden liabilities and haven’t made any efforts to root out any potential liabilities hiding under those piles of paperwork, then now is the time, before you’re forced to deal with them in court.

At Bayview Financial we do our best to make sure your benefits plan is a air tight as possible, from the moment you settle on a plan, through the integration of the plan and beyond.

Getting Rid of Hidden Liabilities

Here are three of the most important steps you can take to minimize your liability in your benefits package:

  • Avoid creating a plan that allows employees to fully opt out – Even a signed waiver from the employee who opted to sign out will not necessarily mitigate any potential liability to you as the plan sponsor. A signed waiver seems air tight at first glance, but any reasonable claim of ignorance can undermine its power. In the case of waivers, all benefits should be reviewed in full and updated both annually and at each status change. Waivers should also be witnesses and signed by your employee’s spouse.
  • Make sure all changes are done in a timely manner – In order to avoid back premiums, late enrollment restrictions, or the chance of benefit reduction or even a benefit decline, it’s best to enroll any new hires within your plan’s waiting period (usually around 3 months) and notify your insurer within 30 days of any and all status changes, ie. marriage, common-law, separation, salary change, etc..
  • Report Salaries – If any parts of your plan coverage are based on income, it’s the plan administrator’s responsibility to disclose any changes (such as a raise or pay-cut) as soon as possible. If not promptly reported, this can lead to improperly paid benefits, as well as possible accountability to the plan sponsor (you, the employer).

Leaky Plans Won’t Stay Afloat

Don’t let your employee benefits plan become a liability to your business. A well-crafted benefits plan will boost both your business and your employees’ confidence.

If your current broker is not bringing these possible liabilities to your attention, then it’s time to find an expert financial advisor who is willing to talk you through the process. We walk each of our clients through a 20 point Plan Administrator Checklist, which not only protects you from risk and liability issues, but also helps you understand and reap the benefits you deserve from a custom-crafted employee benefits plan.