Change of Plans?
Then tell your employees about it.
You've shopped, you've compared, you've made your
decision--now it's time to tell your employees that you're
changing health insurance carriers. What's the best way to do
it? Let the new carrier help you, advises Peter J. Marathas Jr., an
attorney with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, a
law firm in Boston that focuses on employee benefits.
"The insurance company will have an information packet for
you to distribute to employees," he says. Include a memo
explaining the reason for the change. Helping employees understand
the logic behind a decision that greatly affects them is sound
management.
The best time to tell your employees is 30 to 60 days before the
open enrollment period begins, Marathas says. That gives employees
ample time to deal with the impact of the change, but not so much
time that they forget about the deadline.
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Marathas notes that the Employee Retirement Income Security Act
requires you to distribute a summary of material modification
within 60 days of the date the change is adopted-not in advance of
the change. Though you aren't legally required to provide
advance notice, doing so promotes good employee relations. If you
have ex-employees with coverage through COBRA, be sure they also
receive notice of changes. Says Marathas, "COBRAs have the
same rights as active employees."
Jacquelyn Lynn is a freelance business writer in Orlando,
Florida.