Update: Group Life Insurance Settlements with the U.S. Department of Labor
What are your responsibilities as an employer?
In 2023, the United States Department of Labor (DOL) announced settlements with The Prudential Insurance Company of America and Mutual of Omaha (and its related companies).
These settlements covered certain group life insurance plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) where evidence of insurability (EOI) was required under the terms of the applicable plan.
Under these agreements, insurers were required to, among other things, notify group life policyholders that:
- They must not collect premiums from any employee for coverage that requires EOI without first confirming that EOI has been approved by the carrier, and
- If premium is collected from any employee where EOI is required, but has not yet been approved, the group policyholder (employer) may be liable for the benefit.
A few ways to help ensure you’re compliant
- Review all your NYL GBS polices (not just group life insurance) to make sure you are familiar with whether/when EOI is required for coverage to become effective. This is typically referred to as the Insurability Requirement in GBS policies.
- Review your enrollment and payroll coordination process to make sure that you do not collect or remit premium for any coverage requiring EOI approval until EOI approval has been confirmed.
- Review your benefits administration manual for additional details.
If you’d like to discuss potential ways to further reduce the need for EOI, please reach out to your NYL GBS representative.