Dependent Definition (Benefit Tips ® - © 2000)
Most health plans cover the employee as well as their spouse and dependent children.
The most common definition for spouse is the person to whom the employee is legally married or the person the employee has been living in a conjugal relationship for at least 12 continuous months and publically represents as their spouse.
The most common definition for dependent children include: natural children legally adopted children step-children other child that lives with the employee in a regular child-parent relationship
Some plan sponsors exclude dependents that:
- do not reside with the employee
- are employed for 30 or more hours per week.
Enrolling New Employees (Benefit Tips ® - © 2000)
Employers often require new staff to wait for a certain period of time before qualifying for the benefit plan. The duration of the waiting period often coincides with the probation period so that only staff that pass the probationary review receive benefits.
The waiting period can be expressed as:
- calendar months
- first of a certain month coincidental with or next following the date of employment
- calendar days
- days worked
- shifts worked
- hours worked
It is not necessary for all benefits to have the same waiting period. For example, life and disability insurance might start immediate, health coverage after three months and retirement plan commencing after six months of employment. It’s important to balance the employee’s need for coverage with their commitment to the organization. While a gap in life or disability coverage could be catastrophic, a gap in retirement savings is manageable.
Ideally employees would be enrolled with the benefit administrator by the date that their coverage begins. There may be consequences when the benefit administration is not up-to-date. For example, with retirement savings plans, if payroll deductions are not take and funds not transferred and invested then employees will lose the growth on their investment funds and the employer could be held liable for the loss. Most insurance contracts require that employees be enrolled within 31 days of first becoming eligible for coverage. Employees who are enrolled late for insurance coverage must apply for coverage and prove that they are healthy and each of their dependents is healthy before receiving coverage. Furthermore, some insurers also limit coverage for late applicants.