Employee benefits often represent a significant portion of a company’s staffing budget. Apart from the costs of group benefits plans, there’s also a lot of work involved in administering benefits that requires a lot of staff time, careful administration, advanced expertise, and continuous oversight. An error or omission in the administration of employee benefits can cause a company to face serious liability exposure. The best way for companies to protect themselves from this type of risk is by obtaining insurance for employee benefits liability.
Coverage Inclusion Considerations
Experts at World Wide Specialty Programs caution that coverage inclusions may differ between insurers. Some policies may address only claims made against a company by an employee while others can directly compensate employees for their out of pocket expenses attributed to a mistake in administering benefits without the initiation of a legal claim against their employer.
Examples of Errors and Omissions in Employee Benefits Administration
Even the most well-trained and knowledgeable human resources staff can make a mistake in employee benefits administration. Here are some examples of the types of mistakes that can negatively impact individual personnel:
- Inaccurate description of available benefits
- Failure to enroll an employee in health benefits
- Accidental termination of health insurance coverage
- Improperly excluding an employee’s family members from a plan in which an employee had opted to include them
- Enrollment in a healthcare plan that differs from the plan that the employee elected