Change to Group Insurance Policy without notification

Disability Insurance
1

I have worked for a large employer for many years. I am now 62 years old. Upon hire you are offered the choice of different levels of coverage for EHB, LTD, STD etc. and you pay accordingly, these benefits are not taxable. As a single person I always chose the highest level of coverage offered and this was considered a level 2 for LTD. As an employee we were always notified of any changes to group insurance coverage, (for example coverage for psychological treatment increased from $500 to $1000 per year.)

I have been on LTD for 18 months and anticipated a cost of living increase in my LTD as per the policy coverage ( I do believe I will be approved for LTD to age 65) It appears that a new coverage was introduced, known as a Level 3 for LTD and this coverage included the Cost of Living Increase, whereas the coverage I have, Level 2, does not.

My question is does the employer not have an obligation to advise staff of this change to the policy (since they do advise of other changes) allowing staff to decide if they want to purchase this extra coverage ? It came as a surprise to me to find out I did not have the coverage when I know I always chose the highest coverage available, Thanks

2

Did you do an annual registration for benefits selection/enrolment like many large companies do?

3

No, they normally just advise us of changes to the policy such as increased coverage for things like psychological tx, but no advising of this change.

4

Have they been contact non-active employees on LTD for other changes?

I was never notified of changes when I was active (working) and not notified when I went on LTD.
My vision now pays more.

5

Thank you, I have asked my employer when the changes went into effect and if employees were notified, waiting for a response, :slight_smile:

6

If you you were already on long term disability when LTD3 came out, then you wouldn’t be eligible to move to LTD3 when it became an option.

7

How is that different from my employer changing my coverage when I was on LTD?

8

Usually, Once you enact your LTD policy your contract is locked in based on the coverage/premium you had at the time of disability (aka loss). It’s no different than a loss on any other insurance product . This is a good thing, as it protects you from anything your employer does in the future (like going bankrupt or deciding to go with with lower LTD plan to save money).

In contrast, if your employer went bankrupt your extended health benefits coverage would stop as soon as your employer stoped paying the premium. Hope that made sense.

9

Employer policies work a little bit differently. If you’re on a claim then it’s locked in for you. But if not then the employer can make adjustments to what they’re buying for the group every year. It’s pretty common for employers to forget to do the HR things with employees who are off on the various leaves.

10

How would you purchase this, you don’t have pay to deduct from?

The LTD part is locked but the group health can still change?

11

Jammer, yes that is correct. Usually LTD/Life/critical Illness policy contracts are completly seperate from Extended Health Benefits contracts even though they are often (but not always) provided by the same insurer.

LTD/Life/Critical illness contract clauses lock in the moment you submit a claim.