Open enrollment can be intimidating without the right preparation. Questions around the process are already inevitable, but as more employees prioritize their well-being, nothing should be left to interpretation.
After all, most people rely on their employer for coverage. Employer-provided insurance covers 57.3% of the U.S. population, according to the Congressional Budget Office. High participation, of course, means a lot of questions.
It’s no surprise employees want to ensure they secure the right benefits for them and their families. An exceptional open enrollment process helps participants:
- understand their selections
- easily and confidently make choices
- trust their employer
A frustrating open enrollment, however, fractures an employee’s experience. In a Society for Human Resource Management (SHRM) survey, an overwhelming 92% of employees said benefits are important to their overall satisfaction, while 29% claimed benefits were the top reason to look for a position outside their organization. In other words, benefits — and, by extension, open enrollment — are crucial for retention.
So how do you ensure your company’s open enrollment provides employees exactly what they need? There may be concerns you don’t expect, but knowing how to answer the most common ones will give your business an advantage. Keep the following questions in mind as you guide employees through open enrollment.
What is open enrollment?
Open enrollment is the annual opportunity for employees to select or change their benefits for the upcoming calendar year. Although states have varying rules around open enrollment, the process’s purpose is the same nationwide.
What benefits are included in open enrollment?
The most common benefits of open enrollment include:
- health care
- dental, vision or life insurance
- a flexible spending account (FSA)
- short- and long-term disability
- retirement plans
Certain organizations are experimenting with out-of-the-box options, too. Unconventional benefits like pet insurance and financial literacy resources help businesses attract talent and address even more employee needs.
When does open enrollment start?
Federally, this year’s open enrollment season starts Nov. 1 and ends Jan. 15, 2024. Most organizations host an open enrollment period of two to four weeks, according to SHRM.
When do open enrollment changes take effect?
New coverage starts Jan. 1 in most states and through healthcare.gov if the employee enrolls by Dec. 15 and makes their first premium payment on time. Coverage begins on Feb. 1 for employees who enroll after Dec. 15 of the previous year.
If your state has its own marketplace website, remember to verify different deadlines.
Can employees make changes after the open enrollment period ends?
Certain individuals can secure coverage outside open enrollment if they qualify for a special enrollment period due to qualifying life events like:
- moving
- marriage
- childbirth or adoption
- a sudden loss of health care
- an abrupt change in household income
Medicaid and the Children’s Health Insurance Program also allow covered individuals to enroll outside the typical period.
What documents or information will employees need when changing their benefits?
Supporting documentation will vary based on an individual’s needs. For a change in dependents or family status — like for dependents who suddenly need coverage — employees should have the applicable:
- birth certificate
- adoption decree
- divorce order
- death certificate
- marriage license
Those who have recently moved should bring evidence of their new address, like:
- a state-issued ID
- a voter registration card
- a rental or lease agreement
- mortgage or homeowners insurance documents
Some states may require additional items — such as vehicle registration, a passport or a utility bill — for other changes. In fact, your business may already collect some of these documents for taxes or other purposes. An easy-to-use self-service tool helps employees store and retrieve digital versions anytime, anywhere.
What if employees don’t want to change their benefits?
In most states, current selections will automatically roll over each year. However, FSA owners must re-enroll each year.
Active open enrollment requires employees to select their options each year, whereas passive open enrollment allows them to automatically re-enroll in their preexisting selection.
Even if an employee’s situation is largely unchanged, it’s still a good practice to review policy changes and any new benefits. Intuitive benefits administration tech helps them compare past decisions to make confident choices.
Is open enrollment required by law?
Businesses with 50 or more full-time employees — or “applicable large employers” (ALEs) — that don’t offer annual open enrollment can incur penalties under the Patient Protection and Affordable Care Act. An ALE must give employees and their dependents a chance to accept or decline coverage. For example, asking an employee if they’d like to modify their benefits does not qualify as offering coverage.
What if an employee misses open enrollment?
Again, qualifying for a special enrollment period lets an employee who missed open enrollment secure coverage. If they didn’t intend to make any changes, missing open enrollment might not be that consequential.
In some cases, missing the deadline causes employees to lose coverage outright. Communicating regularly with employees and following up with those who haven’t enrolled early can help them avoid potential hardship.
The right HR tech also helps keep open enrollment top of mind with reminders and push notifications. Employees even can complete it from the comfort of their mobile device.
How does my business prepare for open enrollment?
Open enrollment will vary based on an employee’s needs, especially if they acquired a dependent or experienced a significant change. If an individual has completed open enrollment before, it’s a good idea for them to review their previous selections.
The ACA health insurance marketplace offers a checklist to walk employees through any significant life events that may qualify them for special enrollment periods and more affordable plans. Even if an employee doesn’t have a significant change, slight shifts in their coverage may occur.
Communicate with your workforce frequently! The more time employees have to prepare for open enrollment, the better. Doing so could help your organization get the jump on more complicated questions.
Finally, stay on top of legislative changes, especially those related to benefits. New laws can fuel questions, and grasping them as they emerge will help expedite your business’s responses. Consider using a versatile compliance tool to help navigate the evolving regulatory landscape.
Do companies need benefits administration software to support open enrollment?
Open enrollment may seem like a lot, but a smooth, thorough process makes up for it in employee well-being and confidence. While a business isn’t legally required to use benefits administration software, it simplifies:
- setting up deduction amount, enrollment dates and more
- enrolling in and informing workers about plans
- auditing benefits and avoiding overpayment
- notifying employees about benefits and open enrollment
Ready for your organization’s best open enrollment yet? Learn how Paycom’s Benefits Administration tool helps streamline the process for HR and employees.
DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.