Managing Changes in the Workplace- Continuing Life Insurance Coverage

Offering life insurance as part of your employer-sponsored benefits is one way to provide protection for the people who depend on you for financial support. It helps your employees plan for a secure future and provides peace of mind if a tragedy were to happen.

But what if you have to reduce hours, furlough or lay-off employees? What happens to their coverage?

Continuation of coverage

It’s important to note the type of policy you offer will determine what your employees can do with their policy. Typically, in the event of reduced hours, furlough or lay-offs, coverage can be continued for one month if the premium has been paid on time.

If the employee will not be coming back to work, unless your plan provides additional options, in many cases the employee will have three choices:

  • Convert the policy to an individual life insurance policy
  • Port the policy to another group plan with a new employer (if your policy allows this)
  • Cancel the policy

If an employee wants to keep their policy and are unable to move their policy to their new employer, they may be able to convert their group policy to an individual policy. However, because the employee will no longer be on your company’s plan, they will be responsible for paying the entire premium out-of-pocket.

An employer with Advance Insurance Company of Kansas (AICK) life insurance coverage?

If your company is enrolled and offers your employees Advance Insurance Company of Kansas (AICK) life insurance, we have the people and resources to help you stay informed.

While you’ve likely experienced changes in your workplace, if you’ve had to lay off employees, reduce hours or if your business is temporarily closed, as long as premiums are paid, AICK will not enforce any eligibility requirements for coverage until August 31, 2020. Your employees will still be covered.

If an employee has been terminated:

  • They have conversion privileges which allows them the right to convert their group life insurance policy to an individual policy without evidence of insurability. If interested, the employee would need to fill out this form.
  • They can cancel their policy.

To help navigate these changes, reach out to your BCBSKS sales representative. They have the tools, resources and knowledge to help you continue to put your employees first. 

One thought on “Managing Changes in the Workplace- Continuing Life Insurance Coverage

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