Comments on: Watch out for this carrier-switch headache

By: Lynn

Lynn — Fri, 15 May 2009 19:56:34 +0000

Another question I have was “Was it supplemental life or basic life?” Supplemental/voluntary life is usually paid by the employee. He should have received notice to convert it.

Anyway, these scenarios never give you all the details to make a good conclusion. Too much speculation.

By: Judy Buckley

Judy Buckley — Fri, 15 May 2009 18:49:19 +0000

Lynn, thanks for picking up on that. Still doesn’t seem right to lose one’s supplemental life insurance when one is inactive due to terminal illness. From a consumer’s point of view, insurance is supposed to pay when you have a claim. I guess from the insurer’s point of view, the goal is to keep payments at a minimum and not take on any risk. You’re probably aware that the regular life insurance (at least all the ones I’ve seen) reduces the benefit when a person reaches age 65, and again when the person reaches age 70. The closer a person gets to “using” the benefit, the more it shrinks! Such is life (and death) I guess.

By: Lynn

Lynn — Fri, 15 May 2009 14:49:29 +0000

The issue is not the LTD payments. The employee usually remains with the carrier in effect at the time of disability, regardless of how many times the employer changes. The issue was the life insurance. Most times the premium is waived when the employee goes out on disability. New carriers generally state they cover employees who are active when the policy is effective. So the employee would be covered under the other carrier depending on how the policy is written and agreed upon. This information should be provided to employees upon initial enrollment.

By: Randi G

Randi G — Thu, 14 May 2009 23:28:25 +0000

Impossible to keep up with all the rules and regulations — it would be nice if we all just “did the right thing” and then we wouldn’t need all the rules and regulations and lawsuits.

By: Judy Buckley

Judy Buckley — Thu, 14 May 2009 21:39:41 +0000

Yes, Maggie, I was going to say the same thing. In our case, a former employee became disabled more than 15 years ago and continues to collect LTD under the insurance plan the company had then, even though it’s changed a few times since. Maybe there are different rules for different insurers and/or states, but the example in the article shows how cruel some of those rules might be. It sounds like if that company had given the family the “heads up” in accordance with ERISA rules, the man would have become ineligible. Hard to believe.

By: HR Gal

HR Gal — Thu, 14 May 2009 15:44:34 +0000

It is also very important that when an employee is terminated, they receive information on how to continue their LTD or Life Insurance plans by contributing themselves (plan certificates should have this information spelled out). We make sure that all employees at least have a phone number to call if they want to explore continuing benefits.

By: Maggie Mentel

Maggie Mentel — Thu, 07 May 2009 18:37:44 +0000

We have someone collecting LTD benefits from a previous carrier. In June, 2006, our company changed carriers and the person on disability did not go to the new plan. He stayed on the old plan and continues to get payments.

As the article says, you need to look at who is currently collecting on the old policy and make sure they are going to continue to get coverage.