Updating employee records after divorce, remarriage, and other life events

A: Updating the emergency contacts is a good start. While you don’t want to pry into employees’ personal lives, changes in marital status should trigger a review of employee benefits. A remarriage may also involve new dependents. An employee may want to add a new spouse, or new dependents, to the health insurance provided by the company. Similarly, the employee will probably want to make changes to his/her 401(k) or Pension (Defined Benefit) Plan. Finally, the employee will likely want to change the beneficiary designation on any life insurance provided through the company. In a recent U.S. Supreme Court case, an ex-wife received the life insurance proceeds instead of the current wife, because the deceased employee had not changed the beneficiary designation (Hillman v. Maretta, US, June 2013). Certainly, this is not the result that the employee would have wanted.

Consider adopting the following practices to ensure employees don’t drop the ball on this. First, send all employees an annual reminder to review their designations for life insurance, 401(k) and pension, and health benefits. Second, when you learn of a marriage or divorce of an employee, send a form reminder to do the same review. This can help avoid unintended consequences for employees and also help keep the company from becoming entangled in subsequent litigation. If you have any questions, be sure to contact your Vigilant staff representative. Or contact Vigilant to learn more about how we can help you address employment issues like these.