Evidence of insurability means you have to be approved for certain employee benefits by the insurance company before the insurance goes into effect. Approval is based on your medical history so it is possible you could be denied. When evidence of insurability is required, you have to apply for the benefit by filling out and submitting an EOI form to the insurance company when you enroll.
What is Evidence of Insurability (EOI)?
Evidence of insurability (EOI) is an application for group insurance offered through your employer. EOI is required to be completed by an employee who requests insurance amounts that fall outside benefit plan guidelines.
Most of us who deal with employee benefits refer to this application as an EOI form.
We are too lazy to say each of the words so it’s just easier to say EOI.
When is Evidence of Insurability Required?
Evidence of insurability is required when:
- You want to enroll in an amount of insurance that exceeds the guaranteed issue limits of the plan
- You want to enroll but are older than the maximum age guaranteed issue is available to
- You want to enroll outside of an eligible enrollment period
- You didn’t enroll when you were initially eligible and want to enroll at open enrollment
Whether EOI is needed depends on the underwriting offer approved for your employer group. This underwriting offer will vary from company to company and from enrollment to enrollment.
This is why it is always important to go through the open enrollment process each year and review each benefit offered and the guaranteed issue limits available.
It’s especially important to complete your new hire enrollment since the first time you are eligible to enroll, you’ll have better enrollment options and may not need to complete an EOI.
Exceeding the Plan Guaranteed Issue Limits
You were offered the option to enroll in the voluntary group term life insurance plan.
Here are the plan details:
Plan amounts: $10,000-$500,000 in $10,000 increments
Guaranteed issue: $200,000
You want to enroll in $500,000. Since the guaranteed issue is $200,000 you can get up to that amount without needing an EOI.
If you want to enroll in $500,000, EOI will be required.
Exceeding an Age Limit for Guaranteed Issue
You are 75 years old and want to enroll in voluntary group term life. However, the guaranteed issue is only offered to employees up to age 70.
In this case, you would need to complete an EOI and be approved by the insurance company before your voluntary group term life would go into effect.
Applying for Coverage Outside of an Enrollment Period
Most insurance carriers only keep the enrollment period open for a certain period of time. This means if you don’t enroll during the enrollment window, you would have to submit an EOI and be approved even if it was guaranteed issue during enrollment time.
Not Enrolling When You Were Initially Eligible
Your new hire enrollment is the best time to enroll because this is your initial eligibility period. It’s pretty common for the highest guaranteed issue to only be offered during this enrollment.
If you decline to enroll during your new hire enrollment, and then want to enroll later during open enrollment, there may not be any guaranteed issue available at your open enrollment.
In that case, you would need to submit an EOI.
I’ve seen employees get pretty upset because they missed out on a guaranteed issue opportunity when they were initially eligible but weren’t aware of the options.
One reason they might get upset is because they may have a health issue and their EOI request may get denied due to that health issue.
What Employee Benefits Require Evidence of Insurability?
Evidence of insurability will be required for certain group insurance benefits.
The most common benefit EOI is needed on is for group life insurance. However, it is not the only benefit that may need an EOI.
The typical group benefits that may require EOI are:
- Group life insurance
- Critical illness insurance
- Short-term disability insurance
- Long-term disability insurance
Other plans, like hospital indemnity and accident plans, never require EOI during an enrollment.
What Information is Requested on an EOI?
The EOI form asks for your personal (or dependent information if they need to submit an EOI), the specific insurance amounts requested and answers to medical questions.
This means you’ll need to answer questions about any medical conditions you’ve had as well as any doctors you may have visited.
Make sure when you complete your EOI that if it is a paper EOI form, to print your information clearly on the form. It’s frustrating for those of us who have to review EOI forms to process forms where we can’t read your handwriting and will delay the processing of your EOI. You’ll also want to make sure you sign the EOI form. If your spouse is required to have EOI as well then they will need to sign it as well.
Here is a sample of an EOI form for long term disability from The Standard so you can see what one looks like and the types of questions asked..
Do I Need to Have a Medical Exam, Provide Blood or Urine with an EOI?
No, for group insurance benefits, I’ve never seen any insurance company ask for an exam, blood or urine.
Those are usually only requested when you are applying for an individually owned insurance policy – not for group insurance.
You will only have to complete the information requested on the EOI form.
Keep in mind that the insurance company may access your medical information bureau (MB) records as well as your prescription records. This means you want to be truthful on your EOI form.
Should I Submit an EOI if I Have Health Problems?
I usually don’t encourage employees to submit an EOI if they have chronic conditions. I do this for a couple of reasons.
One reason is, if you do apply, it’s likely you’ll be denied anyway.
The second reason is because if there is an open enrollment later where the full guaranteed issue amount is offered, if you were previously declined coverage, you may not qualify for the guaranteed issue.
So, you’ll have to use your own judgment.
If you are on the fence, always err on the side of submitting EOI and make the insurance company decide. Insurance companies have different underwriting rules and what one insurance company may decline another will approve.
Each situation is unique and it can’t hurt otherwise and you will still be approved for any guaranteed issue amount that was available when you enrolled even though you got declined for the higher amount.
What Happens After I Submit My EOI?
When your enrollment requires an EOI, any amount subject to the EOI will be pended until it’s approved.
Let’s say that the guaranteed issue limit was $200,000 and you requested $500,000. The $200,000 will be immediately approved and the deductions for the $200,000 will begin being deducted from your paycheck.
The premiums for the additional $300,000 won’t begin until the insurance company approves your request.
In the meantime, once the insurance company receives your EOI form, they may need additional information, you’ll want to provide this information as soon as possible.
Once the insurance company has everything they need to make a decision, they’ll notify you of their decision.
They will also let you and your employer know when the insurance becomes effective so watch for your deduction to change if your EOI is approved.
How Long Does It Take for an EOI to be Processed?
It takes several weeks for your EOI to be processed. Most EOI’s are submitted in the fourth quarter of the year when insurance companies are swamped with EOI requests.
Be patient but follow-up with your employer on your EOI to make sure it was received. Your employer can check with the insurance company or their broker to find out the status.
What Happens if Your EOI Got Declined?
If your EOI gets declined, you’ll be approved for any guaranteed issue amount that was available when you enrolled. The additional pending amount you applied for will be withdrawn and your deduction will remain the same as it was before.
It may be disappointing to find out your got declined. Remember, though, to always carefully review the benefits offered at each open enrollment. Employers often change insurance carriers and when they do, they usually offer guaranteed issue the first time to most employees when the new insurance company offers their plan.
This will be a good chance to get coverage if you were previously declined.
Conclusion
You need to submit EOI when applying for group insurance outside of the plan limits. Once submitted the insurance company will review your request and either approve or deny it.
Check with your employer or their insurance brokers for more details when you enroll.
