Evidence of Insurability (EOI)

In the United States, 69% of nonunion, private sector employees have access to health insurance benefits, and 55% have access to group life insurance policies. Still, employees often need help understanding how these benefits work and what is required to obtain them. One requirement that can be confusing to HR professionals and employees alike is providing evidence of insurability.

While this information isn’t required in all cases, it can catch employees off guard when an insurer asks for it. Discover what you need to know about the ins and outs of providing evidence of insurability and how these details can affect your employees’ coverage options.

What Is Evidence of Insurability?

Evidence of insurability (EOI) is the healthcare information that is collected to determine the insurance company’s level of risk associated with extending health or life insurance to someone. Providing evidence of insurability usually involves submitting an application with an extensive questionnaire and official documentation of the applicant’s medical history.

The insurance company then uses this information to determine the individual’s eligibility for coverage and what level or type of coverage the insurer can offer. Insurers use this process to protect an employer’s group insurance from adverse risks associated with disproportionate claims. In turn, this helps employers control coverage costs.

Questions That Might Be Asked on an EOI Form

The structure of an evidence of insurability form will be different depending on which insurer an employee is seeking coverage from and the state laws governing that coverage. However, the general type of information insurers ask for on an EOI form tends to be universal. Here are some of the questions employees may encounter when filling out one of these forms.

Age

An individual’s health often changes as they age. Many insurers believe that the older you are, the more likely you are to seek out healthcare for major problems and the closer you are to reaching your life expectancy. Consequently, an insurer will ask for your date of birth to understand what their chances are of having to pay out a lot of money in a shorter period of time.

Physical Attributes

Insurance companies operate on the generally accepted medical advice that weight is associated with health. Typically, an EOI form will ask for height and weight to determine an individual’s body mass index (BMI). Though an applicant may not be denied coverage due to a higher BMI, this information will be factored into their overall health assessment.

Personal Details

Details such as an applicant’s name, address, driver’s license or ID number, and contact information help verify the person’s identity. They also allow the insurer to contact the applicant if there are further questions about their evidence of insurance eligibility.

Employment and Financial Information

An applicant’s employment history matters to an insurer because having a steady job for a long period of time means a higher likelihood of financial stability and an ability to keep up with premium payments. An applicant’s occupation also becomes a part of their risk profile.

Job type matters to insurers. A person with a job that’s considered to be more dangerous (such as a construction worker) may pose a greater financial risk to the insurance company than a person working in an office.

Coverage Details

An insurance company may want to know about an applicant’s coverage history to determine whether they’re seeking more coverage than they need. This can be a red flag to some insurers.

Being overinsured may affect the amount of insurance an individual qualifies for with a new policy. Additionally, an insurance company may ask about additional coverage so they can properly coordinate benefits in the event of a claim.

Medical Conditions and Treatment History

Unless the applicant is trying to get a guaranteed issue policy, questions about medical history are often paramount to helping the insurer determine an individual’s eligibility for insurance coverage. This information becomes a huge part of their risk profile.

Insurers use details about medical conditions and treatment history to determine the expected lifespan or to assess the likelihood of having to spend large sums of money on an individual’s care. This assessment affects the types and amount of coverage the applicant will have access to. In certain cases, it may determine whether an insurer will extend any coverage at all.

When Does an Evidence of Insurability Form Need to Be Filled Out?

Employees won’t have to fill out an evidence of insurability form for every single insurance plan they select. Instead, insurance companies tend to require this information in specific circumstances.

First, insurers often ask for an EOI form when an applicant attempts to obtain coverage beyond the amount guaranteed by the group plan. This is so the insurer can calculate the business risks of extending this coverage to the employee.

Additionally, an insurance company may ask an applicant to fill out an EOI form if the applicant submits a late application for coverage for themselves or one of their dependents. Reasons for this scenario include initially refusing coverage and then asking for it at a later date, applying for coverage after the 31-day eligibility period, and notifying the insurance company of a qualifying life event more than 31 days after it happens.

Insurers may also ask for an EOI form if an employee needs to reinstate their insurance coverage after an initial lapse. Information from the EOI helps insurance companies recalculate the overall risk involved in adding a specific applicant to the group plan for both late applications and coverage lapses.

Finally, an insurer is likely to ask for an EOI form when an employee is requesting coverage for voluntary benefits. Depending on the employer’s offerings, optional plans may include disability coverage, accidental death and dismemberment (AD&D) coverage, or term life insurance.

EOI Deadlines

It’s a good idea to remind all employees to check with your HR department if they have questions or are unsure about deadlines surrounding EOI forms for the specific insurers and coverage types you offer. However, most insurance companies adhere to some typical deadlines.

When it comes to initial benefits enrollment, new hires should submit their application for coverage within 31 days of the first date of employment. The EOI form should be sent within 15 days of that application. In subsequent annual enrollment periods, employees should make sure they apply for coverage by the end of the period and submit their EOI forms within 15 days.

Sometimes an employee experiences a qualifying life event (QLE) that requires a change in their benefits (including enrollment in a new type of coverage or a change of plan). Many different situations can qualify as a QLE:

• Changes in family status (e.g., divorce, having a baby, or adopting a child)
• Becoming eligible for Medicare coverage at the age of 65
• Sudden losses of coverage, such as the case of a 26-year-old aging out of a parent’s policy or a job status change at work
• Moving to a new location

Though this list isn’t exhaustive, it can give you an idea of situations that can be considered QLEs. In these cases, the application and EOI form should be submitted within 31 days of the change in the employee’s status.

How to Provide Evidence of Insurability to Your Employees

In most cases, employees can complete the entire evidence of insurability process directly through the insurance company. In this digital age, many insurers provide online platforms and portals that allow employees to fill out and submit the form.

Insurers may also provide paper applications, which employees can usually get from the HR benefits administrator. Employees can return the form to the administrator, who will then transmit that information to the insurer.

Ensure Employee Wellbeing by Providing the Right Information at the Right Time

Employee wellbeing can lead to better job performance and productivity. One big part of ensuring employee wellbeing is providing employees with the benefits they need and the right information to easily access them.

As an HR professional or business leader, you must take the time to understand the EOI process for yourself. When you do so, you can help employees know what to expect, obtain the coverage they need, and have more peace of mind about their future.