August 19

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Everything To Know About Overage Dependent Coverage Eligibility

There are always so many small things to remember in life.

‘Did I lock the door?’ ‘Do we need eggs?’ ‘What time is soccer this week?’ Sometimes we are so focused on the small day-to-day items that we completely forget to zoom out and remember the other ones running in the background that need our attention just as much.

Only sometimes, these have more significant and longer-lasting impacts than a missed soccer practice.

Fear not. We have compiled a checklist of helpful insurance-based reminders, notes on overage dependants, new employee eligibility, travel insurance, and life insurance beneficiaries to remember as we head into the back nine of 2021.

What are Overage Dependents?

Let’s start with the basics. According to Benefits by Design, when a dependent child reaches a certain age threshold – usually around the ages of 18-21 – the benefits coverage they were generally able to access through their parents’ plans and will be terminated if they are not re-classified as an overage dependent, or if they have a disability and are medically and financially dependent on their parent.

Pro Tip: Most plans limit the coverage to up to the age of 26 in Quebec or 25 in the rest of Canada, and then they will automatically be removed from the plan regardless of enrollment in post-secondary schooling. Always let your plan administrator know right away to maintain their up-to-date records and continued coverage.

Are your children starting or finishing school? Don’t forget this!

A good reminder for remembering when an overage dependant can still qualify is at the beginning or the end of a school year.

To still be eligible for medical services, dental benefits, employee assistance programs, and health spending accounts, the insurer needs to have re-confirmation, otherwise, they won’t have any coverage.

The criteria to continue receiving benefits coverage through an employee benefits plan might differ, but these are general rules to follow.

  1. They can qualify – if they are enrolled in full-time studies at either a university or college.
  2. They can qualify – if they are financially dependent on their parent or guardian.
  3. They will not quality – if they graduate from High School and are not pursuing post-secondary school, and are not financially dependent on their parents,

Pro Tip: Any educational institution at a post-secondary level must be recognized by Revenue Canada to maintain eligibility.

New employees need to be enrolled within 30 days after hiring

Insurance carriers will typically accept applications of a new employee within a 30-day grace period after the hire date. However, if they do not enroll within that window, the employee will be asked to complete a medical questionnaire and either their coverage will be approved, completely denied, or their health and/or dental will have restrictions for the first year – but at full premiums.

Benefits typically go into effect at the end of a waiting – or probationary period – but the 30-day window still applies.

For example:

If an employee has a 3-month probationary period and starts on Sept 1, they are eligible on Dec 1st and need to be enrolled by Jan 1st.

Pro Tip: Remember,if you aregetting married or entering into a common-law partnership, you will need to report this within 30 days to your plan administrator or insurer to maintain coverage.

Double-check your beneficiaries

Whatever your beneficiary statement says trumps your estate plan – it is the go-to document used to distribute assets.

This is a cautionary tale that too many people lose sight of. Separation or divorce will not automatically remove a beneficiary designation. So, to ensure that all proceeds will reach your intended beneficiaries, you have to change the beneficiary designation on a policy.

Pro Tip: Remember to update every single one of your beneficiary forms to ensure your assets go to the right person.

Have flexible travel insurance in your back pocket

If your concern is COVID-19, cancellations, or just needing supplemental coverage, finding flexible travel insurance protection is essential. With many people going away for Christmas or snowbirds heading south for vacation in the winter, it is vital to have the correct type of protection in place now more than ever.

Remember to get Out-of-Province Insurance if you’re travelling within Canada because some services are covered under OHIP – and some are not. Many Canadians would never imagine they would need travel health insurance while travelling to another province in Canada.

If you have benefits coverage, travel insurance is always included. However, there are rules about travel coverage:

  • You can’t be flying to somewhere that is on the government of Canada’s do not fly list.
  • You can’t do something dangerous, such as off-piste skiing or skydiving.
  • Your health needs to be stable in the 90 days before your trip.
  • You won’t be covered if you have a new medical condition and you’re waiting to see a specialist – you won’t be covered.
  • You won’t be covered if you’re on medication and you’ve changed the dosage of your meds (e.g. increased from 25mg to 50mg).
  • Benefits travel doesn’t cover anyone in their last trimester of pregnancy.
  • Anything illegal isn’t covered.

In an age where we are now hyper-aware of our health and coverage, it is critical to have an additional layer protecting you.

Pro Tip: Ambulances are not universally covered under The Canada Health Act. Check the provisions and wording of your policy, and ask the necessary questions of your carrier before assuming you have complete coverage.

About the author 

Chris Gory

Chris Gory is the founder of Orchard Benefits (formerly Insurance Portfolio Financial Services Inc.), a brokerage launched in 1999 that helps companies build the best benefits programs for their employees. Chris is passionate about helping entrepreneurs, and works with over 80 startup companies. He is an advisor at the Ryerson DMZ and he's led talks about employee benefits and insurance at several startup accelerators including Extreme Startups, OneEleven, and Ryerson's Startup School. Chris has also been featured in the Toronto Star and The Globe & Mail, and was a member of the Board of Directors of the Applied Client Network, an international association of independent insurance professionals, from 2012-2018.


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