Building a Group Benefits Plan for Your Business – Why you should consider your group benefit contract as a long-term commitment (although it really isn’t).
The majority of group benefit plans can be cancelled with a 30-days notice provided to the insurance company. However, cancelling your policy may result in difficulty finding a new policy and some insurance companies even require as long as a 3-year waiting period before reinstatement if you cancel your group benefit contract.
You should also be aware that if you’re unhappy with your first renewal (OR receive a very high first year’s renewal) it will be near impossible to move to another insurance company at that point in time. Insurance companies do not want to insure groups that switch plans every renewal. If the insurance companies allowed your company to switch providers on every renewal, they would not recover the losses incurred from your group. Further, this would lead to the common practice of switching plans each year which has administrative implications.
What does this imply?
THAT ALTHOUGH NOT EXPLICITYLY WRITTEN – IN THE MAJORITY OF CASES, YOUR COMPANY’S GROUP BENEFITS POLICY REQUIRES YOU TO MAINTAIN THE POLICY FOR AT LEAST 1 RENEWAL. THIS CAN BE ANYWHERE FROM 2 – 3 YEARS.
This is why you should have a long-term view when determining what group benefits product to implement. Just as important (arguably more important) as your quoted rates are; your plan design, the insurance company you’re committing to and the broker you’ve chosen to work with.
We receive numerous requests from groups that we unfortunately cannot help because they are within this “locked” period after their first renewal. Usually, the implied commitment was not properly explained or disclosed by the current broker.
Northern Financial Group is committed to advising clients on plans that have a long-term focus. This is why we designed our Olympic Benefits Plan that is exclusive to Northern Financial Group. If the Olympic Benefits Plan doesn’t suit your needs, we also have the ability to source custom design quotes from all top group benefit insurance providers.