What It Means for Cover to Lapse
In an employee benefit scheme, cover only remains active if contributions and data are kept up to date. A lapse occurs when this does not happen. This can be the result of missed payments, delays in updating joiner and leaver data, or the termination of an employee’s record without proper continuity being arranged.
A lapse in cover means that the employee is no longer eligible for benefits under the scheme, even if the employer intended them to be. For example, if contributions are missed for a month, or if a worker’s details are not included in the latest data submission, that individual may be treated as having no valid cover in place.
This is not just a technicality. In practice, it can mean that if the employee becomes ill, is injured, or suffers a bereavement in the family, their claim could be rejected. For employers, this raises serious risks. Staff who believe they are protected may find they are not, leading to disputes, a breakdown of trust, and potential reputational damage.
In sectors such as construction, where accidents and absences are more common than in many industries, the impact of a lapse can be even more severe. Cover is only as strong as the accuracy of the data and the timeliness of contributions. Understanding what a lapse really means is the first step to avoiding costly and damaging mistakes.
Real-World Consequences
When employee benefit cover lapses, the impact is immediate and serious. What looks like a small administrative delay can have significant financial and contractual consequences for both employees and employers.
Loss of sick pay or death benefit eligibility. If cover is not active at the time of an absence or a death, no payment will be made. This can leave employees and their families without vital financial support. For an employer, it can also mean dealing with distressed staff who expected benefits that are no longer available.
Claim rejections. Even if contributions are restarted later, any claim made during the period of lapsed cover will be refused. Once a claim is denied, it cannot be backdated, and the loss is permanent. This creates both financial and reputational risks for the business.
Breach of collective agreements. Many construction employers are part of frameworks such as the ECIA National Agreement, BESA agreements, or TICA arrangements. These contracts often require continuous employee benefit cover. Allowing cover to lapse may put the employer in breach of these agreements, exposing them to legal or financial penalties and damaging their reputation within the industry.
The consequences of a lapse are therefore more than just administrative. They affect employee wellbeing, employer compliance, and the trust between a company and its workforce.
Welplan’s Flexibility And Process
Welplan’s schemes are designed to be fair and consistent, but they also depend on accurate data and timely contributions from employers. If payment is missed, or if joiner and leaver information is not updated, employees are automatically removed from cover. This ensures that only active members with valid contributions are protected.
While this process is necessary, it does not mean employers are left without support. Welplan provides reminders, guidance, and access to dedicated account managers who can help identify gaps before they result in lost cover. Employers are reminded of their responsibility to keep records up to date, but they are also supported with tools to make this task easier.
The flexibility of a discretionary scheme also plays an important role. If an error occurs, and there are genuine reasons for a delay, trustees may review the case with fairness in mind. However, this is not guaranteed. The safest route for employers is always prevention.
In practice, this means that employers must take responsibility for the accuracy of submissions. Welplan’s role is to provide the structure, reminders, and support to reduce the risk of lapses, but ultimately the quality of the protection depends on consistent administration by the employer.
How To Prevent Lapses
The good news is that lapses in employee benefit cover are avoidable. With the right processes in place, employers can protect staff from losing cover and protect themselves from compliance risks.
Set internal reminders. Employers should schedule monthly reminders to check that contributions have been paid and data has been submitted on time. This reduces the risk of a deadline being missed during busy periods.
Keep joiner and leaver data up to date. Employee movements are one of the most common causes of lapses. If a new starter is not added promptly, or if a leaver is not removed correctly, cover records will quickly become inaccurate. Allocating responsibility to a single HR or payroll contact can help maintain accuracy.
Use Welplan’s support for bulk updates. For larger employers or those with frequent staff changes, Welplan provides support with data uploads and bulk updates. This can save time, reduce errors, and ensure that all staff records are accurate.
Train staff on responsibilities. HR teams and managers should be aware of how lapses occur and what the consequences are. A short training session or process checklist can prevent costly mistakes.
By following these steps, employers can dramatically reduce the likelihood of lapses. Prevention is always better than correction, especially when an employee’s financial security may be on the line.
Checklist For Staying Compliant
Avoiding an employee benefit cover lapse requires consistent attention to detail. Employers who build compliance checks into their routine will find it easier to keep cover active and avoid the risks of rejected claims or contract breaches.
Here is a simple checklist to review:
Monthly checks
- Confirm that all contributions have been paid in full and on time.
- Check that any new starters have been added to the scheme without delay.
- Remove leavers promptly so that records remain accurate.
- Review pending claims to ensure the correct data has been provided.
Quarterly checks
- Reconcile payroll data with benefit scheme records to confirm accuracy.
- Review any staff on long-term absence to confirm that their records are still active.
- Speak with your Welplan contact if there are changes to workforce numbers or structure.
Annual checks
- Review the scheme as part of year-end HR and finance planning.
- Confirm compliance with industry agreements such as ECIA, BESA or TICA if applicable.
- Refresh staff communications to remind employees of the benefits in place.
By carrying out these checks, employers not only stay compliant but also demonstrate a proactive approach to employee welfare. This builds trust, reduces disputes, and ensures the workforce remains protected.
Keep Your Scheme Active And Trusted
Allowing employee benefit cover to lapse creates unnecessary risks. Missed contributions or late data submissions can result in rejected claims, lost staff protection and potential breaches of industry agreements. For construction employers in particular, where compliance and workforce security are closely linked, these risks can quickly escalate.
Welplan makes it easier to stay on track with reminders, guidance and direct support. Employers who build simple processes and use the tools provided can protect their teams and maintain confidence in their scheme.
Speak to Welplan’s team today to arrange a scheme review or request a compliance guide. By acting now, you can safeguard your employees, avoid compliance issues and ensure your business remains protected year after year.