The very simple statement of "know your contract" seems like a very obvious one and to most HR professionals, it is. The reality of the situation is, to most people, employee benefit programs represent a very small percentage of what keeps them busy on a day-to-day basis and the attention group benefits receive is proportionate; therein lies the problem.
The courts and HR advocacy groups hold employers, both large and small, to the same high standards as it relates to the knowledge of your group benefit contract. The expectation is that employers fully understand their coverage and administer their programs accordingly. There is little tolerance for ignorance and in the event of a breach, the employer is usually held responsible.
Our experience tells us that the most common mistakes made lie in the areas of participation (voluntary vs. mandatory) and late applicants. Both of these involve loss of coverage and are usually triggered by an unfortunate event and carry financial consequences. Something as simple as misinforming an employee as to the level of coverage can very easily come back to haunt the administrator.
The bottom line is: know your contract, make sure your communication is correct and ensure your errors and omission insurance is in place. As a consultant, it is part of our role to ensure a strategy and policy exists and to assist in mitigating risk in this regard.