Changing group insurance companies will happen for some employers every so often. Most businesses move to a new insurance company because they can save money and in today’s economy insurance companies understand that.
When changing insurance providers it is very important that certain protocols are followed, including giving proper notice of termination and leaving on good terms. You never know what may happen in the future and you may need their product again. It is proper to give a minimum 30 days notice, some may accept as low as 21 days.
As an advisor, my clients expect me to guide them through the complexities of group insurance/employee benefits. It has come to my attention lately that advice given by other agents could affect a business’s reputation with the insurer. These agents are properly advising the insurance company that the group plan is moving to another insurance carrier within 30 days, but during that 30 day notification they advise the employees to “slam” the current insurance company with dental claims, eye exams, eye glasses, renew prescriptions at the maximum allowable under the plan, etc.
This is not unethical or against insurance rules. It is more of a nuisance to the insurance company as they have no way to recover their expenses. You may think it is a big insurance company and they can afford the loss, but insurance companies have very long memories and it is your reputation that is being tainted, not the agent’s. You should be aware that agents giving this may advice have had their marketing rights terminated, or your business may be put on a “do not quote” list for that particular insurance company.
In the employee benefit community you, as a business, should be cautious of such advice and always seek a second opinion if any advice is questionable. It is your reputation on the line.