by Matthew A. Struck, CPCU, ARM – November 28, 2017

Part of maintaining an enthusiastic and high functioning workforce along with attracting top talent is the benefits package that you offer. In fact, millennials entering the workforce are asking for more and more when it comes to their benefits. Also, the current health insurance market creates tons of exposure in this arena. So what are the potential pitfalls and how do you address them?

What Could Possibly Go Wrong?

Employee benefits liability is a coverage that can be included in your insurance program. But don’t let that rest on your laurels if you currently have coverage. Benefits liability claims can result in huge payments owed to employees and/or dependents and can create a massive drop in morale within your workforce. Most of these claims originate from two sources – Poor Communication to Employees and Program Design

  • Poor communication can result in employees or dependents misunderstanding which benefits they are eligible for, deadlines for eligibility, or extreme disappointment when employee expectations are not met
  • Program Design issues can be inadvertent or intentional; inadvertently excluding eligibility for an employee or group of employees or intentionally excluding eligibility when regulations or legal statutes are misunderstood or ignored
Best Practices
  • Utilize an experienced HR professional or consultant to design and update your Benefit Packages annually
  • Always consult legal counsel, especially when your work force is collectively bargained or included employees with complex contractual agreements
  • Communicate all changes in the benefit program as soon as possible and in as many ways as possible (requiring employees sign off that they have received notice is always advisable)
  • Provide in-person and web-based seminars and Q&A sessions (for current employees & new hires)
  • Whenever financially feasible, use an outside provider to maintain retirement or benefit accounts that hold valuable assets – they will be bound by fiduciary duty laws and should carry a significant insurance policy to cover any breaches in that duty; this will also eliminate the employees’ perception that handling assets in these plans is being done based on management’s bias or lack of expertise
  • Anticipate and stay informed of regulatory and legislative changes that may affect your current Benefits Program or changes you are seeking to implement in the future
  • Maintain an open line of communication with employees so they voice their interest in program enhancements/offerings
Other Resources

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*Treadstone Risk Management is an insurance broker and risk manager. We are not attorneys. Always seek legal counsel when changing/implementing any policies and procedures. Include your broker/risk manager in the process.
**If you have any questions regarding insurance program structures, coverage concerns, or alternate insurance options, please visit, follow Treadstone Risk Management on LinkedIn, on Twitter @TreadstoneRisk, on Facebook, on Youtube, or email

Treadstone Risk Management LLC was founded by two experienced insurance professionals who share a vision of providing the highest level of service and professional expertise to public and private sector Property & Casualty insurance clientele. Treadstone has identified a need in the insurance brokerage and risk management industry for an agency whose personnel possess the highest level of industry education, training, and experience. We pride ourselves on our ability to deploy those skills collectively through premier customer service and attention.