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An employee benefits mishap

Twins Are you a small business owner who struggles with having to wear many hats – including handling HR and benefits?

Sometimes it’s a tough balancing act to make sure you’re offering your employees a good benefits package – and still bringing business in the door.

Imagine this ...

As you walk in the office door thinking about your busy day, you’re greeted by one of your employees, Kim. She’s just returned to work after giving birth to twins. Kim gives you a quick update on the kids - they are doing great and it is wonderful to be back in the office. 

You reply in a friendly voice, “So glad to have you back and wonderful to hear the children are doing great.”

Have you just been given notice that an employee now has two new members in the household?  Do you have any responsibility to make sure that those children are on the company’s health insurance plan and you are collecting premium?

Two months go by and one day you overhear some employees talking about Kim’s twins  who are in the hospital with a respiratory illness.  All of a sudden that light bulb goes off in your head.  You never added them to the company’s group health insurance plan. 

It’s time to call your insurance agent!

After a brief discussion you are relieved.  You purchased Employee Benefits Liability

Under this coverage form, your policy would provide coverage if you were found legally obligated to pay under certain circumstances.

For example, if health insurance coverage HAD been in place for the twins and $2,500 would have been paid for by the health insurance carrier -  you may be found legally obligated to pay the $2,500. Generally speaking, your employee benefits liability insurance would cover expenses that should have been covered if the health insurance was in place.

This may also apply to other benefits that you offer such as disability, vision, and 401(k).

Mistakes do happen and it is nice to know you are covered when something serious does go wrong.  In a case like this, you could lose a good employee if you forgot to add new family members to their health insurance plan. 

What would you have done if the children were diagnosed with a more serious illness?  Would you have had enough coverage?


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