Great Employee Benefits Packages
At Hershenberg & Stone-Walsh Insurance we are always looking for tips to help our clients alleviate the load that comes along with offering an employee benefits package. Part of our process is to coach employers on best practices to avoid unnecessary frustrations. On a typical day, it is not uncommon for clients to reach out to us regarding insurance invoices and why they appear to be wrong. There are many ways in which an invoice can be interpreted as incorrect at first glance. We believe that understanding the processes and timeframe of an insurance carrier invoice can alleviate most of the confusion. It is important for whoever pays the bills to not self-adjust and pay a different amount that is on the invoice.
When looking at an insurance invoice, what your viewing is really a snapshot of who was on your plan roughly 2 to 3 weeks ago. Invoices are produced anywhere from as early as the 5th of the month to as late as the 15th of the month. This means that any changes that were made after the invoice was generated or even slightly before will not be reflected until the next invoice. An addition of a new employee to a policy or the removal of an employee from a policy can take on average up to 10 business days for an insurance carrier to process. Put simply, you are looking into the past, not the present or the future.
Below is an example of why understanding what these invoices are showing you is so important. Let’s say you are a small employer with 8 employees. Friday night rolls around and 4 of your employees go to the local saloon. After a few cocktails, Billy Bob convinces everyone to ride the 4-seater mechanical bull in the middle of the bar. The bulls a buckin’ and everyone’s laughin’ until the bull operator hits the “buck” switch. Now, all 4 employees are airborne, upside down and flying towards the back bar. It isn’t until the liquid courage wears off that everyone begins to understand the “gravity” of the situation. The next morning all 4 employees wake up with a hangover for the ages and at least 1 extremity the size of a small tree stump. Before you take a sip of your freshly brewed Saturday morning coffee your phone is reaching supernova status due to rapid fire text blasts from half your workforce at the Emergency Room completely hysterical because their insurance is being denied. Why is this?
Well, for the past 3 month’s your office manager has taken it upon themselves to pay the insurance company what they think they are owed. She had noticed on recent invoices that a few recently termed employees were still on the bill(s). She decided to short pay the carrier these premiums not realizing that for the next couple invoices the insurance carrier would be crediting your company’s account for these recent terminations. In essence, what she did was give your account credit on top of the credit that the insurance carrier was also going to apply. The insurance carrier doesn’t realize this, all they see is that your account has been deficient for the past 3 months and they put all claims hold for your account.
Even though the above illustration may be a bit over the top, the lesson here is to understand what the invoice is telling you and the timeframe of the snapshot you are looking at. At Hershenberg & Stone-Walsh Insurance we pride ourselves on educating our clients on a variety of issues that will make their lives and businesses run as efficiently as possible.
The blog post was written by our Employee Benefits Manager, Robert Booth.