How to Add or Delete Employees in Group Health Insurance?

Addition and Deletion of Employee in Group Health Insurance

A group health insurance is provided to the employee when joining the organization. The employee receives coverage from day one of his time on the job. It is to be noted that the insurer has no limit (maximum number of times) in terms of changing the employee list. That means the employer can add or delete the names and details of the employees multiple times throughout the year.

But have you ever wondered how he is covered on an immediate basis? To understand this, we need to understand the function of a ‘cash deposit account’.

Maintaining Cash Deposit Account

The cash deposit account is just like a regular bank account, but for the purpose of group health insurance, it is maintained by the insurance provider for the company. A cash deposit account, unlike a banking account, is non-interest-bearing. That is, the employer does not receive any interest on the amount lying in the account.

The employer must deposit a minimum of 20% of the initial buffer amount in the cash deposit account. Thus, the account maintains a credit balance.

Employees Addition Process in Group Health Insurance

Mostly, a dedicated relationship manager is allotted for group health plans. Any instructions with regards to the addition or deleting of the employee data from the policy can be given to the relationship manager. Alternatively, with an online and app-based service, the employer himself can submit and track requests for any changes.

As we know, if a new employee joins the group, the insurance policy is purchased by endorsement. This endorsement document is attached to the main insurance contract and amends the policy. Once the endorsement is done, the premium amount is debited from the employer's cash deposit account. The employee is then covered for the mentioned health risks from day one of his joining.

*An endorsement in a group health insurance policy is a formal change to the original terms, allowing the policyholder (often the employer) to adjust coverage. This could involve altering limits, adding benefits, changing policy terms as well as adding or removing employees.

Employees Deletion Process in Group Health Insurance

Similarly, in case the employee leaves the company, a process to delete the employee data and record needs to be initiated. While deleting the employee from the employee list. In other terms, addition and deletion of employees is also known as group health insurance endorsement process.

Conclusion

Adding or deleting employees from group insurance plans is no longer a tedious task. Thanks to technological advancement in the insurance sector, administrative processes like these are now instant and hassle-free. A sufficiently funded cash deposit account ensures that no risk is uncovered.