What is a Plan Administrator?

Plan Administrators are one of the most important components of a group benefits plan, but they are also regularly one of the most overlooked. The role of a Plan administrator is to serve as a key contact between the employees and the insurance company, providing important details about group benefits to plan members and keeping key information up to date on the administration system. This is critical to ensuring that employees have the correct coverage and are not penalized due to late enrolment in the benefits plan.

Unfortunately Plan Administrators are rarely experts in group insurance and are likely responsible for more than just their PA duties. Plan Administrators have access to large amounts of sensitive employee data, such as dates of birth, dependant details and salaries. It is therefore important to choose the correct person for this role.

Here are a few of the items that a Plan Administrator is responsible for on a regular basis:

• Updating salary information: Salaries often change annually, but can also change at any point in the year due to promotions or pay raises. Several group benefits such as Life, Short Term Disability and Long Term Disability have premiums based on an employee’s salary. Any claims for these benefits will use the salary information currently on record for that employee (as that is what their premiums have been based on). Not keeping salaries up to date can have serious consequences, for example an employee’s disability benefit could be lower than anticipated because it is based on their salary from several years ago. Because the premiums for these benefits are often salary based, updating a certificates salary details in the admin system will likely increase the premiums they are paying.
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• Updating employee’s key information: Employee details change over time and can have a material impact on their employee benefits. Perhaps they recently got married or had a child, which means new dependant information to capture and potentially a change in their family status. Job changes can impact an employee’s salary, but it can also impact which benefits class they are in (for example moving from the regular employees class into the management class). Switching from part time to full time, or vice versa, could impact their eligibility for group benefits. All of these things need to be tracked in the admin system by the PA.
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• Adding new employees: Timely enrolment of new employees is important to ensure they receive their appropriate coverage without penalty. Insurers can impose restrictions on coverage or require additional medical evidence  for employees that are considered late enrolee’s in the plan.
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• Cancelling employees: Just as important as adding new customers is ensuring that employees are cancelled as soon as they are no longer eligible. This will help to control the group’s overall claims experience. Note that there are several cancellation circumstances that will automatically be handled by the insurance company, for example when employees reach the termination age they will automatically be cancelled.
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• Billing: Plan Administrators are often the ones tasked with handling the monthly invoices for group insurance, ensuring that payments are kept up to date. This is important to ensure that claims are paid promptly.
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• Record keeper: Once a group plan is initially setup it is common for the Plan Administrator to become the key record keeper. This means it will be their responsibility to keep paperwork such as enrolment forms for new employees, rather than sending these in to the insurance company.
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• Supporting Employees: Plan Administrators act as a key resource for employees when dealing with group insurance enquiries. They are often the first port of call for employees questions regarding plan coverage. The expectation is not that PA’s are intimately familiar with the ins and outs of the groups benefit plan (although it certainly helps) but they often provide resources such as replacement benefit booklets, claim forms and important announcements.
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• Pulling together documents:  This can start in the marketing phase when the PA will need to provide up to date employee data to the Insurance Advisor to accurately market the group. If the group chooses to switch insurance carriers it often falls to the PA to help gather all the required documentation, such as updated enrolment forms for all employees. The PA may also be involved in distributing the new documents such as new enrolment cards, benefit booklets and marketing materials.

These are just some of the important tasks that PA’s are involved in. Most insurers will provide a handbook or guidance to help PA’s understand their duties and teach them how to use the administration system.