Wednesday, August 09, 2017

Don't Throw Away Your Benefits Confirmation Statement

Each enrollment period, you should receive a benefits confirmation statement. This statement confirms what benefits you selected for the upcoming enrollment year. In this article, I'll talk about why you want to make sure you get one each year. Plus, you'll want to keep each and every confirmation you receive for as long as you work for your employer.

Why is the Benefits Confirmation Statement Important?

Your benefits confirmation is your receipt that proves what you signed up for at enrollment time. Without it, if there is any question about what you enrolled in, your stuck. That's because you have no record of what you signed up for if you didn't remember it that way.

Because time passes and people forget things easily, what matters most is what's on paper - or PDF in this day and age. Remember, having written proof of enrollment selections matters a whole more than verbal conversations do.

A Simple Example of Why the Confirmation Statement is Important

Let's say that at your initial enrollment you were offered supplemental group term life insurance on a guaranteed issue basis. The amount you could get at the time without any medical questions was $200,000. You decide you need the additional group term life and ask if you could get more than $200,000.

You learn that you if you want, you could go as high as $500,000 with what's called evidence of insurability. That means you have to qualify for it by answering medical questions.

At the time you don't have any health problems and decide you want to do that. Later you learn you were approved for the higher amount and tuck that fact back in the memory banks for later.

Eight years later, unbeknownst to you, your employer decides they are going to make some changes to the benefit plans and the group term life insurance program changes to another insurance carrier.

Now behind the scenes this is what's called a takeover. This means that the insurance company will again make a guarantee issue offer to new employees and "take over" the group life insurance amounts everyone else has already.

Enrollment time comes, only this time, you are in a hurry. You don't have much time to take care of your enrollment this go around. Since your company has face to face enrollments, you meet with the enroller and let them know I'm in a hurry, I just want to keep everything the way it is. So the enroller, zips through your enrollment and gets you on your way.

However, when the take over of the group life occurred, for some reason your benefits didn't carry over the $500,000. The enroller had no idea what you had last year and assumes the system is correct because they can only go by what they are given and aren't involved in the takeover process.

In fact, it's not unusual for enrollers to have no clue what you had the year before and it's not really their fault. They can only work with the information they have been given.

This particular year, you also attained a new five year age band and so the premium was more for the $200,000 than before and you don't notice much difference in your paycheck so nothing seemed out of the ordinary.

That is until a few enrollments later, you finally notice that your benefit confirmation shows you only have $200,000 and so you question it. You are told that's what it shows you have. If you want more than that amount, you'd have to provide evidence of insurability again. But unfortunately, you found out last year, you had type 2 diabetes and can't qualify for the higher amount.

In this situation, you'd probably be upset and rightly so. But this is where the benefit confirmation statements from each year can help. It's your proof that when the takeover occurred, someone goofed.

Now technically, it might not be possible to fix this problem. That's because, it's really up to you to make sure everything is done the way you want. It'll depend on the agent the company has. But without the confirmation, you could definitely be out of luck.

Check your confirmation at each enrollment carefully and compare it to last years

At every enrollment, you want to get a confirmation. And it's a good idea to compare it to last year's statement. This will help you confirm that you have what you wanted and also see how it differs from last year.

Check you payroll deductions to make sure they are correct

Once the year begins, take a look at your payroll deductions and make sure they match your confirmation statement as well. These days with all of us on direct deposit, it's easy to never look at your pay stub and just look at the net amount in your bank account and move on.

Paying attention to your payroll deductions can help you spot a problem when it happens.


So, my advice is that each enrollment, get a confirmation statement. Compare it to last years once you receive it. When the new deductions start, confirm your deductions are correct.

It's much easier to correct a problem when it occurs than several years later with no record of what you had before.

Let me know in the comments, if your employer provides you with a benefit confirmation statement at enrollment time. And also let me know if you have had anything similar happen to you.

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Michael is a champion of guaranteed issue for employees in the workplace. He's been an insurance agent since 1992 and has worked with thousands of employees.