The Importance of Providing Employees with Conversion Notice upon Termination
Did you know that most employer sponsored Group Life Insurance policies have a Conversion or a Portability provision that allows an employee to take their employer paid life insurance with them upon loss of eligibility? These privileges are especially important when an employee has a medical condition that would make it difficult for them to qualify for coverage on their own.
Providing this notification to employees is the responsibility of the employer, not the insurer, broker or third party administrator. While all these parties can provide valuable advice as to how to comply with your responsibility, it ultimately rests with the employer.
In order to ensure that you are in compliance and providing the necessary notification in a timely matter we suggest taking the following action steps.
- Confirm the exact language in your contract. Does your policy offer Conversion or Portability?
- Request the necessary notification from the insurance carrier to ensure you are providing the most up to date notice. This can be requested through your contact at Exude.
- Confirm how long you (the employer) has to provide the notice and how long an employee has to exercise their right to Convert or Port the policy.
- Add the discussion or Conversion or Portability of Life insurance to your termination process and any process that takes place when an employee losses eligibility under the group plan participation rules.
To learn more about your specific policy provisions and responsibilities, please reach out to your Exude, Inc. Account Manager who can help you with the above action items.