Quick Summary
CD balance stands for Cash Deposit balance — a pre-funded account an employer maintains with the insurer or TPA on a group health policy. When people are added during the policy year, the pro-rata premium for that addition is debited from this float, so cover can begin at once without a separate payment each time.
How the CD Balance Works
- Funds mid-term additions: New joiners, newborns and newly added dependents are covered via an endorsement, with the cost drawn from the CD balance.
- Must be topped up: When the balance runs low, HR needs to replenish it; if it is exhausted, additions can be held up and new employees may be left temporarily uncovered.
- Deletions credited back: When an employee exits, the unused pro-rata premium is usually credited back to the CD balance.
Best Practice for HR Teams
Monitor the CD balance monthly against your hiring pipeline, and keep a buffer so a hiring spike never delays an employee’s cover.
Get the right group health cover for your team
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