HealthChoice Life Insurance Plan
- HealthChoice Life Insurance Plan.
- Basic and Supplemental Life.
- Guaranteed Issue.
- Accidental Death and Dismemberment.
- Dependent Life.
- Life insurance application.
- Beneficiary designation.
- Retirement life insurance.
- Life insurance claims.
HealthChoice Life Insurance Plan
The HealthChoice Life Insurance Plan is a group term life insurance plan available through employers who elect to carry the EGID life insurance plan. What does this mean to your members?
- No individual policies are issued.
- Term life insurance pays benefits upon the death of the insured but has no cash surrender value. This means a member cannot borrow money against the life insurance or cash it out when coverage ends.
- If the life insurance coverage is termed due to cancellation or for nonpayment of premiums, the life insurance coverage ends.
- The insurance is through HealthChoice only and is not underwritten by another insurance company.
- Claims on life insurance are paid to the beneficiaries that the member selects. Advise members to keep a copy of their confirmation statement showing life insurance amounts and a copy of their beneficiary form to ensure life claims are paid accurately.
Important life insurance reminder: In order to be eligible for life insurance, the employee must be covered under health insurance that is not an excepted benefit. Refer to Excepted Benefits in the Glossary section. If this health insurance is with a plan other than through EGID, you must get proof of the other health coverage. Keep a copy of this proof in the employee’s file. If the employee drops or loses this other health insurance, it is the employee’s responsibility to notify you of this loss. If the employee does not have continuous health insurance in effect, they are not eligible for HealthChoice life insurance.
Basic and Supplemental Life
Basic Life: This is the first $20,000 of life coverage. Because some employers pay this portion as a benefit to employees, it is listed separately.
Supplemental Life: Any life insurance that is above the Basic Life amount of $20,000. Supplemental Life is only available in $20,000 units.
For new hires only; not for established employees who never had life insurance before and want to add life coverage at Option Period. When enrolling in Basic Life, a new hire can also elect Supplemental Life in the amount equal to two times their annual salary rounded up to the next $20,000 unit without completing a life insurance application.
Example: A newly hired employee has a salary of $36,000 a year and wants to enroll in the Guaranteed Issue amount of life insurance. Multiply the $36,000 by two ($72,000), then round up to the next $20,000 ($80,000). The total amount of Guaranteed Issue is $80,000. With the Basic Life, the newly hired employee’s total life insurance coverage is $100,000. If the new hire requests additional amounts above this Guaranteed Issue amount, a completed life insurance application must be approved. The maximum amount of Supplemental Life available through HealthChoice is $500,000. With the $20,000 Basic Life, the employee’s maximum life insurance available is $520,000.
NOTE: Employees rehired by the same employer within 24 months are not considered new hires and cannot elect a greater amount of life insurance than they had at the time of termination unless they submit a life insurance application.
|HealthChoice Basic Life ($20,000) $4.20||First $20,000 of Supplemental Life $4.20|
Age-Rated Supplemental Life – Cost per $20,000
|< 30 ---------- $1.20||35 – 49 ------ $2.80||65 – 69 ------ $14.80|
|30 – 34 ------ $1.20||50 – 54 ------ $5.20||70 – 74 ------ $25.60|
|35 – 39 ------ $1.20||55 – 59 ------ $8.00||75+ ---------- $39.20|
|40 – 44 ------ $1.60||60 – 64 ------ $9.20|
Accidental Death and Dismemberment benefits
Basic Life and the first $20,000 of Supplemental Life include Accidental Death and Dismemberment benefits. AD&D benefits are only available to current employees and apply when death, dismemberment or loss of sight occur as the result of an accident. Refer the HealthChoice Life Insurance Handbook for more information. Former employee and Dependent Life coverage do not include AD&D benefits.
|AD&D BENEFIT (Member Only)|
|LOSS OF||WITH BASIC LIFE||WITH SUPPLEMENTAL LIFE|
|Both hands, both feet or sight of both eyes||$20,000||$20,000|
|One hand, one foot or sight of one eye||$10,000||$10,000|
Dependent Life is available to any employee who is covered with at least Basic Life. No life insurance application is required since the only criterion is that the employee must be covered with Basic Life for dependents to be eligible. There are three levels of Dependent Life benefits and one set premium per level regardless of the number of dependents covered. If one dependent is covered under Dependent Life, all eligible dependents must be covered under Dependent Life.
|DEPENDENT LIFE||LOW OPTION($2.60 per month)||STANDARD OPTION($4.32 per month)||PREMIER OPTION($9.42 per month)|
|Child live birth to 26 years||$3,000||$5,000||$10,000|
Dependent Life is the only benefit that allows a person to be covered under more than one member’s account (i.e., a child covered under both parents’ accounts for Dependent Life). The employee is the only beneficiary of Dependent Life coverage. There are no Accidental Death and Dismemberment benefits attached to Dependent Life.
In the case of simultaneous death with the employee and a dependent covered under Dependent Life, if it cannot be determined who passed first, the claim will be paid as if the dependent passed first and the proceeds will go to the employee’s estate. If it is determined that the employee passed first, the Dependent Life ceases and nothing is paid out. This type of occurrence is rare.
Life insurance application
- A new employee applies for Supplemental Life coverage in an amount greater than Guaranteed Issue (new hires only).
- A rehired employee (within 24 months) wants to increase the amount of insurance they previously carried.
- A current employee elects to enroll in or increase life insurance coverage at Option Period or during a midyear qualifying event.
An application is not required when an employee:
- Makes no changes to life insurance in effect.
- Decreases or drops their current amount of life insurance.
- Adds Dependent Life when at least Basic Life is in effect.
- Is a newly hired employee who transferred from another EGID employer and wishes to continue the amount of life insurance coverage already approved by EGID.
COORDINATOR RESPONSIBILITY FOR THE LIFE INSURANCE APPLICATIONS
- To ensure you are using the most current copy, print the appropriate life insurance application from the EGID website.
- Complete the coordinator section at the top of Page 1. Refer to the form later in this guide.
- If the employee requests assistance completing Section 2 of the life insurance application, you may do so without violating privacy guidelines.
- Make a copy of Page 1 before you give the application to the employee.
- The employee must complete Page 2 and sign and date Section 3.
- Do not add this additional life insurance to the employee’s coverage. If approved, the additional life insurance will be added by EGID Member Accounts. A letter of approval or denial will be sent to the insurance coordinator.
EMPLOYEE RESPONSIBILITY FOR THE LIFE INSURANCE APPLICATIONS
- Forms must be submitted within the set deadline.
- Height and weight fields are required.
- Requests of $300,000 or greater will require the employee to submit a minimum of two years of medical records from a U.S.-licensed medical provider.
- Employee is responsible for any costs related to the copying of medical records.
- Approval or denial of application will be sent to the employee’s address and a copy is sent to the coordinator.
It is the employee’s responsibility, not the coordinator’s, to ensure the life insurance application is accurate, complete, signed, dated and returned by the deadline to:
EGID HCMU P.O. Box 57830 Oklahoma City, OK 73157-7830
An incomplete life insurance application will result in automatic denial.
Beneficiary Designation Form
The Beneficiary Designation Form is the document a member completes to designate how the member requests the life insurance be paid out upon death. An employee electing life insurance should name a beneficiary at that time. Some things to remember or consider when assisting the member with the Beneficiary Designation Form:
- Primary beneficiaries are who the employee wants to have the life insurance proceeds. If more than one primary beneficiary is designated, life proceeds are shared equally unless the employee provided other instructions on the form.
- Contingent beneficiaries are alternate beneficiaries who will receive the benefits only if all primary beneficiaries die prior to or simultaneous with the employee.
- The Beneficiary Designation Form can be updated at any time. The last one dated in the EGID system will supersede all previous Beneficiary Designation Forms.
- A beneficiary can be one person, several people, an estate, trust, charitable organization, foundation or anyone who can provide EGID a legal receipt for life insurance benefits.
- When a minor is named as a beneficiary and the life proceeds are $10,000 or less, a claim can be made by the adult responsible for the minor. If the life proceeds are over $10,000, a court must appoint a guardian for the minor before proceeds can be paid.
- If there is no beneficiary designated or the member neglected to sign the Beneficiary Designation Form, life proceeds are paid to the employee’s estate.
Special Instructions due to legal separation and divorce
If an employee is legally separated or has filed for divorce but it is not finalized, remind the employee that state statute prohibits changes to any insurance coverage that directly affects the spouse unless specifically stated in the legal separation or divorce filing. This includes updating the Beneficiary Designation Form if the spouse is listed as a beneficiary.
If an employee gets divorced, remind the employee to update their Beneficiary Designation Form even if the employee wants the now former spouse to remain a beneficiary. State law says that any beneficiary designation signed before a divorce listing the former spouse as a beneficiary shall be considered void. If the employee wants the former spouse to be the beneficiary, a new Beneficiary Designation Form must be completed and signed after the divorce date to make the former spouse a valid beneficiary.
Retirement life insurance
Leaving employment is a major event in an employee’s life. Planning for life insurance needs is a vital decision to be considered carefully. Here are some valuable reminders for retiring employees:
- An employee can keep any life insurance they currently have with HealthChoice in a vested, non-vested or retirement account.
- An employee cannot add or increase life insurance at or after retirement.
- An employee going on COBRA cannot take life insurance.
- An employee who elects to defer their insurance coverage to a spouse also covered under EGID insurance must take their life insurance out on their own vested, non-vested or retirement account or lose it. Life insurance cannot be deferred.
- The employee can keep member life insurance in $5,000 units up to the amount they currently have in effect.
- The employee can keep Dependent Life insurance currently in place in $500 units.
- If the employee is receiving a pension from an Oklahoman retirement system, have the employee check with their retirement system about any death benefits for which they may be eligible.
Life insurance premiums increase at retirement for the first $40,000 of member coverage. The premium for $5,000 to $40,000 is rated at $2.16/$1,000 of coverage. Any amount above $40,000 is age-rated. Dependent Life increases to $1.08 per $500 unit per dependent.
There is no Accidental Death and Dismemberment benefit for former employee life insurance. Since retirement is a life-changing decision, it is recommended that a new Beneficiary Designation Form be completed and sent to EGID at retirement. The Beneficiary Designation Form can be updated at any time, and the most updated form received by EGID supersedes all previous Beneficiary Designation Forms.
Filing a life claim
A completed Life Insurance Claim Form Packet and an original or certified copy of the death certificate are required to file a life insurance claim. Only one death certificate is required, even with multiple claims on the life insurance. Additional documentation may be required.
For additional information, the Filing for Life Benefits-Brochure is available on the IC webpage, where you can also download a claim form for a beneficiary.
In the event of an employee’s death, life proceeds are paid to the beneficiary listed on the most recent signed beneficiary designation provided to EGID. If no beneficiary is designated prior to the employee’s death or there is no signed beneficiary designation, proceeds are paid to the employee’s estate.
In the event of a covered dependent’s death, Dependent Life proceeds are always paid to the employee. If an employee or dependent dies at the first of the month before premiums are paid, any insurance premiums due at the time of the insured’s death are withheld from the life insurance proceeds.
A beneficiary can assign all or a portion of the life insurance proceeds to a funeral home to help pay for burial costs.
Because life insurance premiums are paid post tax, benefits are not taxed when paid out. For former employees drawing a pension from a state retirement system, the $5,000 death benefit offered through a retirement system such as OPERS and TRS is a taxable benefit. Assignment to a funeral home for the death benefit will assist in lowering the tax burden of the benefit.