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Evidence of insurability (EOI) is personal health information that insurance carriers require plan participants to provide. This is often done through an EOI form that serves as a medical questionnaire.
Carriers usually request an EOI form to be submitted for voluntary products when the plan participant chooses a coverage amount that is over the guaranteed issue amount (the amount of coverage that is pre-approved by the carrier).
The carrier will also require EOI if the plan participant:
- Chooses to enroll in any amount of coverage when they declined coverage in the past
- Chooses to increase their existing coverage by any amount
These are commonly known as late entry rules (or late entry penalties). They’re a standard way for carriers to manage their risk for voluntary products.
Here’s what happens in Maxwell if an employee or spouse elects coverage in a voluntary product that requires EOI based on the above rules:
- While the employee is shopping for the product, they’ll see their pre-approved amount and their pending amount represented once they enter a coverage amount over their guaranteed issue:
- Once the employee checks out of shopping:
- Maxwell will immediately send them an EOI form to complete (as long as you have that set up in your portal). Learn more about auto-sending forms here >
- On the administrator side, you’ll see that the employee is confirmed to enroll in both the voluntary product and the voluntary EOI product. The pre-approved amount will display on the voluntary product, and the entire coverage amount they selected will display on the EOI product.
You should process the voluntary product (or allow it to be automatically processed when you end open enrollment if this is during your annual OE) as this coverage amount is pre-approved by the carrier. You should leave the EOI product in a status of confirmed to enroll until you find out that the EOI has been approved by the carrier. During this time, the employee will see that their EOI product is pending:
- Once you receive confirmation from the carrier that the additional coverage amounts are approved, you should process the amount on the EOI product. You can also adjust the amount or close out the product if the carrier denied some or all coverage. Learn how to close out EOI here >
If you're electing coverage on behalf of the employee
If you’re ever electing coverage on behalf of the employee in Maxwell on the “Eligible Products” tab, you should add the entire coverage amount that the employee would like to elect on the voluntary product. You’ll see that the amount will default down to the pre-approved amount and the entire coverage amount will be applied to the EOI product once you process the voluntary product.
How to add a coverage amount over the pre-approved amount on behalf of the employee
Special rules during annual open enrollment
In an effort to increase participation, some carriers may offer different evidence of insurability requirements during your company’s annual open enrollment. While a carrier will always require evidence of insurability for employees who are offered the product for the first time and choose to elect over the guaranteed issue, they may allow some flexibility when it comes to those who were previously offered coverage or want to increase their coverage at this point.
Maxwell offers the flexibility to run an open enrollment that allows every employee and spouse to be treated as a first-time enrollee with access to the guaranteed issue, regardless of their past interactions with the product (sometimes called a “true open enrollment” or “one-off special open enrollment”).
Maxwell also offers the ability to enable employees to increase their inforce coverage by an additional amount without requiring evidence of insurability (sometimes called “additional purchase guarantee” or “one-off provision”).
Your Advisor will set this up in your Maxwell portal if the carrier offers these terms.
Special rules outside of annual open enrollment
If an effort to increase participation, some carriers may allow late entrants to enroll in the lowest increment without requiring evidence of insurability. This is an available option for any plans with late entry rules, as long as the plan allows employees to choose their increment amounts. Your Advisor will set this up in your Maxwell portal if the carrier offers these terms.
Special rules for rehires
At times, carriers allow rehires not to be subject to EOI based on late entry rules if it’s been an extended period of time since they left the company and were previously enrolled in or offered coverage. Currently, Maxwell does not allow for this scenario and ensures late entry rules are applied to all rehires, regardless of how long it’s been since they were previously employed by the company. (Of course, this requires that the employee was listed in the Maxwell system during their previous employment). While this may cause an EOI product to be created when it’s not necessary, you can always manually approve it in Maxwell without having the individual complete a form.
Special rules for certain life events
Sometimes a carrier will allow an employer to designate specific life events that should not require EOI based on late entry rules. Currently, Maxwell does not allow for this customization and requires EOI based on late entry rules during any life event for the employee or spouse (other than “marriage” and “change in domestic partnership status” for the spouse). While this may cause an EOI product to be created when it’s not necessary, you can always manually approve it in Maxwell without having the individual complete a form.
- In Maxwell, evidence of insurability can be set up on all voluntary lines of coverage (life, critical illness, disability) except for voluntary cancer and voluntary accident plans. EOI is not commonly covered for these types of plans.
- Maxwell does not support different guaranteed issue amounts based on the employee or spouse’s age.
- Maxwell does not support giving late entrants access to a guaranteed issue amount above $0.
- One of the late entry rules mentioned above is if an employee declines coverage, they will be subject to evidence of insurability the next time they’re offered coverage. Please note that in the Maxwell platform, the employee does not need to actively waive or even log in to be considered as “declining” coverage. They only need to have been offered the product at a point in time.
- For voluntary critical illness products, some carriers do not use a form and instead have the employee answer health questions right in the Maxwell shopping experience after they elect a coverage amount that requires EOI. For those products, Maxwell does not currently support late entry rules and only requires EOI if the employee elects over the guaranteed issue. You can manually administer late entry for these products by following these steps.
- When the late entry functionality went live on September 6, 2018, any products where the maximum coverage amount is the same as the guaranteed issue amount (this is the case for most voluntary disability products and some voluntary critical illness products), late entry rules were not applied automatically and will be added by your Advisor at renewal, if applicable. This is because it varies as to whether or not late entry rules apply to these products. If you’d like to add these rules before your next renewal, please talk to your Advisor who can put in a request with the Maxwell team to update this for you.