Notifying your carrier of salary changes is essential for maintaining accurate and effective group benefits, particularly in the realms of Life and Long-Term Disability coverage. Here’s why:

Accurate Coverage: The amount of Life and Long-Term Disability coverage an employee qualifies for is dependent on their salary. If salary changes are not promptly communicated to the carrier, there is a risk that the existing coverage may no longer align with the employee’s actual income. This misalignment could result in under-insurance, leaving employees without the coverage they need.

Risk of Under-Insurance: Failure to update salary information may lead to situations where employees are under-insured. In the event of a claim, the coverage provided may be insufficient compared to the employee’s true income. This will create financial and legal challenges for the employer if held liable.

Employer Liability: If the fault lies with the employer, and a claim is filed based on outdated salary information, the employer could be held liable for the difference in coverage. Legal consequences may also arise, emphasizing the importance of proactive measures to avoid such liabilities.

How to Update Salary Information

Collage HR is an all-in-one platform for employee information. Inputting salary updates in Collage will automatically sync this data with your carrier, keeping your plan current and up to date!

If you are not using Collage, we recommend minimum annual updates with your benefits renewal, every January or ideally at the time the salary changes occur.