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Refund of prepaid contributions?


Guest moto
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Our employees are paid twice a month. If somebody terminates employment on the 17th, insurance ends on the 17th; however, premium contributions are deducted from their last paycheck on the 30th (for the entire period). We only refund the contributions if the former employee calls and complains. Evidently, the logic is that employee coverage begins from date of hire even though we don't collect retro contributions, so it evens out. While I haven't been able to find anything on point, it seems to me that we should be refunding the contributions? Any insight or suggestions?

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If there is no coverage then there is no premium due, is there ? So a refund of unused premium is proper. Premiums are only due for periods for which there is coverage. So a refund of the proportional amount (18th-30th) is due. It is rferred to as unearned premium.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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