Open enrollment is when employees review their current benefit elections and compare them to all the options offered by their employer. It can include medical, dental, vision, and ancillary products like supplemental life, long-term care and disability.
“Some employers are unenthusiastic about open enrollment since employees are pulled out for mandatory meetings, but it alleviates a lot of issues during the year for HR,” says Marifel Divinsky, an account executive in the Employee Benefits department at Momentous Insurance Brokerage, Inc. “It’s a time for both the employer and employee to work together.”
Smart Business spoke with Divinsky about best practices for open enrollment that will minimize administration headaches.
Is it helpful to have open enrollment early?
Yes. This strategy usually begins with reviewing the entire benefits plan design and premiums 90 to 120 days prior to the renewal date. The employer works with its broker to review current data from its incumbent carrier and competitive quotes from additional carriers. Carriers are trying to get renewal notices out earlier because the Affordable Care Act requires employers to give notice with a Summary of Benefits Coverage at least 60 days in advance of changes.
The employer should have open enrollment during the month prior to the renewal date. Although not mandatory, open enrollment re-educates employees about benefits and any rate changes, even if the plan structure stays the same. Also, employers need time to prepare communication pieces to notify their active eligible employees, employees who are on leave and COBRA/Cal COBRA participants about upcoming changes. Once open enrollment is complete, employee changes are communicated to the carriers, and fresh ID cards can be generated as needed.
What can employees change during open enrollment?
Employees can make changes to their current benefits elections — add or remove eligible dependents and change plans, from HMO to PPO, or vice versa. They aren’t allowed to make any changes during the policy year, unless they experience one of the following qualifying events:
- A change in legal marital status, including marriage, death of a spouse, divorce, legal separation and annulment.
- A change in the number of dependents, including birth, adoption, death and placement for adoption.
- A change in employment status of the employee, or the employee’s or retiree’s spouse or dependent, including termination or commencement of employment.
- A dependent ceasing to satisfy eligibility requirements for coverage due to attainment of age, student status or marital status.
Employees are responsible to notify employers of a qualifying event within 30 days of the event. Otherwise, they might need to wait until the next open enrollment period.
If employees understand their benefits, how does that help the company?
When employees understand their benefits, they make good decisions. This helps prevent administrative problems and manage how employees access benefits and deal with billing issues. Employee satisfaction and better use of the plan can improve productivity in the workforce. In addition, benefits education lends itself to an appreciation of the benefits offered by the employer as part of the overall compensation. Ultimately, good benefits help employers retain and attract talent.
How can employers encourage employees to participate in open enrollment?
Use education and communication, such as posters, weekly emails, or online tools and resources from the carrier. They also can work with their insurance carriers and broker to schedule a mandatory enrollment meeting to help employees understand what benefits are offered and how they work.
However, some employees don’t like discussing their benefits in a group. They need to meet with the broker one-on-one or call directly. Sometimes brokers host quarterly question-and-answer sessions, which may alleviate claim issues and save time. Brokers have great relationships with carriers and can help expedite solutions.
Marifel Divinsky is an account Executive in Employee Benefits at Momentous Insurance Brokerage, Inc. Reach her at (818) 933-2738 or [email protected].
Insights Business Insurance is brought to you by Momentous Insurance Brokerage, Inc.