Employee benefits liability insurance is a useful tool for your small business or even grand corporate venture. The purpose of employee benefits liability insurance is to make sure that if the administrative staff for the benefits department fails to properly enroll employees in benefit programs, the employee is still covered.
What is Employee Benefits Liability Insurance
Let’s take an example. Robert is working for ABC Corporation. He asks the HR department of his company if he can enroll in health insurance. They of course oblige and have him fill out paperwork in order to get enrolled in their primary health care benefit plan.
Robert fills out all of his paperwork and submits it to the administration. The administration means to file the paperwork, but the stack of papers gets piled up on the office desk. By the time that the due date for enrolling in that particular health insurance plan has rolled around, the administrative staff has let the paperwork get lost in the pile on the desk and failed to enroll Robert in his health insurance.
Employee benefits liability insurance makes sure that Robert is still covered. Despite the fact that the administration at his company has failed to file his health care paperwork, he is still able to gain health insurance benefits. This is the purpose of employee benefits liability insurance. Here are four reasons why you need employee benefits liability insurance.
#4: Less Room for Error
Employee benefits liability insurance leaves less room for error. It makes it so that when the administrative staff forgets or fails to file for benefits on time, the employee doesn’t have to compensate for this room for error. This form of insurance makes up for mistakes made by administration staff.
#3: Employee is Covered
This type of insurance makes it so that no matter what, the employee is taken care of. He or she does not have to worry about missing out on health insurance or even retirement investment benefits. He or she can sleep sound knowing that once the paperwork has been filled out, the burden is then on the company itself to submit all of the necessary documents. This saves the employee their peace of mind.
#2: Company Itself is Covered
This type of insurance affords the company itself benefits as well. It makes it so that the company can still make mistakes without being held liable. The insurance carrier takes on the burden of providing health insurance benefits or retirement savings benefits to the employee even if the administrative staff has been negligent.
This means that the company administrative staff has less reason to worry. They can submit paperwork late if tasks are piling up without risking the employee benefits. The company is really supported in all ways by this type of insurance.
#1: Keeping the Insurance Companies in Business
Last but not least, this type of insurance is beneficial from an economic standpoint because it keeps the insurance companies in business. If employers make mistakes in filing their employee insurance documents, then the insurance companies are still guaranteed to accept the paperwork. This means that overall the insurance companies enroll more people in health insurance.
The insurance companies obviously need a certain amount of enrollment requests per year in order to stay in business. Having employee benefits liability insurance makes it so that the insurance companies receive more enrollment requests per year and therefore are more able to stay in business. This benefits not only in the insurance companies but the economy as a whole, as it means that more business is being conducted.
Overall, employee benefits liability insurance is a good thing. It makes it so that the employee doesn’t have to worry about their administrative staff’s mistakes. It covers the company so that they are not liable for missing out on filing their employees paperwork. It keeps the insurance businesses running and overall is good for the economy.