Group Life Administration via Web May Be Trickier Than It Looks
Executives at companies that administer benefits through the Web predict that completing the job of putting group life administration online will take awhile.
Many companies are already helping employers put downloadable group life forms and group life information on the Web.
From a technical standpoint, administering the typical employer-paid, group term life plan through the Web “is not really complicated,” says Stuart Spector, chief operating officer of Benelogic L.L.C., Timonium, Md. “Many of [the plans] are guaranteed issue.”
In that case, Spector says, all the employer needs is a Web system that can pass basic enrollment information and information about beneficiary designations to the life insurer.
But even a simple group life program may be more complicated than it seems, says Pat Byrd, senior vice president in charge of new product development at Black Mountain Group Inc., New York, a human resources and benefits consulting firm that has developed its own Web-based administration system.
An employer with what appears to be a plain-vanilla program may, in reality, offer basic coverage for employees, supplemental coverage for employees, policies for spouses, policies for children, and other options that create what amount to six or seven separate plans, Byrd says.
When plan complexity increases, “theres a lot of room for errors,” Byrd says.
Even when software can handle a group life plans quirks, “most companies, from a safety standpoint, would like to have certain things signed on paper,” Byrd says. “Most of the insurance companies, for example, require that the spouses be aware [employees] are taking life insurance out on them.”
When employers offer employees a chance to buy coverage over a guaranteed-issue amount, that dramatically increases the likelihood that someone will have to use paper, Spector says.
“Its a process that cant be fully automated,” Spector says. “Each company tends to have its own way thats a little bit different.”
Reproduced from National Underwriter Edition, May 12, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.