Adding and Deleting members on small group Medical Insurance schemes

One of the day to day tasks that I regularly undertake for clients is the addition of new members and the deletion of members off schemes as they leave employment. Both are pretty straight forward pieces of work that take but moments to log and pass through to insurers.

Of particular importance for the employer is making sure that when employees are eligible to go on cover (many companies have a probation period for staff of three or six months) they do notify the insurer (or preferably myself) that there is a member to join.

If an employer forgets to add someone it is always possible to add them later but there is of course a potential problem. The new members underwriting occurs at the point at which we tell the insurer the member is to go on cover. Then whether the member is joining as a new moratorium or fully underwritten there is generally an exclusion period of medical conditions for five years prior to the date of joining.

As an aside, large corporate and some SME cases are sometimes underwritten differently on what's called 'Medical History Disregarded' or MHD terms - this works entirely differently and is not the situation I am describing.

The problem then is that if you forget to advise us a new member can join and they subsequently develop a new medical problem prior to actually joining then that condition is not going to be covered under the medical insurance plan. Insurers are very strict about this and have all sorts of safe guards in place against this kind of negative selection, not least being unprepared to back date underwriting except in exceptional circumstances.

This scenario to be fair happens fairly infrequently but when it does it can (for obvious reasons) upset employees and cause fairly major problems, even if it is a simple mistake or an oversight on the part of the employee /employee it is unlikely to be something we can fix.

Obviously if the insurer makes a mistake and doesn't add someone when told (i.e. we have a paper trail to show we told the insurer) then the issue is easily soluble.

So my advice to clients is, if you haven't added a process already, perhaps add another step in your HR or recruitment process that suggests or diaries inclusion on the medical insurance scheme for staff as they become eligible.