Certainty today and tomorrow.
Ongoing communication, education and adaptation are key to staying current. Join us here to see updates on topics important for you and your business.
Understanding how much group insurance coverage you have under your Employer-sponsored plan can be a complicated subject for many employees. We are here to help you and your employees understand the insurance formula and understand how these benefit amounts are calculated.
You need first to take note of the following variables:
A Non-Evidence Maximum Benefit (NEM) is the benefit amount that you are eligible for regardless of your medical history. In other words, no matter how sick you are, the insurer cannot deny you this basic level of benefit and coverage. If your income is fully insured under this level, there is nothing more for you to do; you are at the proper level. If it isn’t and you have the option to apply for ‘top up’ you may want to apply for the extra coverage
An Overall Maximum Benefit (OM) is the total benefit to which you are entitled, this will include your Non-Evidence amount plus a top-up coverage for those employees whose incomes deem they are eligible over and above the automatic basic amount (under the NEM). Now, unlike the NEM, it is up to you to understand these levels and apply for a top-up. You must apply and be approved for this top-up coverage. If you are in good health, you will likely receive this top-up approval; however, you could be declined if you are not in good health. However, even if you are refused your ‘top-up’ you are still eligible for the highest level available NEM, and if you feel like down the road your health has changed, you can always reapply.
Joe’s income is $75,000. Employer-sponsored life insurance benefit is two times the annual income. Overall Maximum Benefit for Joe is $150,000. Let’s say in this case the Non-Evidence Maximum is $100,000. Joe will automatically have $100,000 of life insurance, and if he chooses to apply for his $50,000 of top-up, he will be fully covered to his overall maximum benefit of $150,000. Moreover, the reverse, if Joe is declined top up, he remains at $100,000 the NEM.
It is easy to assume you are covered fully on your annual income. However, you must be cautious of the insurers Non – Maximum Evidence levels and remember that it is your responsibility to apply for the top up. If you are unsure as to whether you are eligible, please ask your plan administrator or call your Employee Benefits Consultant with Core Benefits Inc.