Annually, an open enrollment solution provides employees with the opportunity to reassess their workplace benefits. This is a chance to modify plans, include coverage, and explore optional benefits such as identity theft protection and pet insurance. Melanie Tinto, the Chief Human Resources Officer for payment solutions provider Wex, emphasizes that thoughtful decisions are crucial for employees.
According to 2021 data from the Bureau of Labor Statistics, benefits constitute almost a third of the average total compensation for workers.
Therefore, if employees make their selections carelessly, they may be leaving a significant amount of money on the table. Open enrollment companies deliver choices that are typically binding for the entire year.
However, employers are available to assist. Lydia Jilek, Senior Director of Voluntary Benefits Solutions for global advisory firm Willis Towers Watson, notes that last year was a year of significant experimentation. Amid the COVID-19 pandemic, companies broadened the methods by which they provided benefits information to workers. Jilek anticipates that this year will see more innovative communication options.
The Centers for Medicare and Medicaid Services (CMS) reports that 13.6 million individuals have enrolled in health insurance through HealthCare.gov and state-based marketplaces (SBM). This exceeds the numbers from the last year of the Obama administration. It additionally sets records for traditional Open Enrollment period participation, as well as, first-time enrollments on the insurance exchanges.
Each year, during open enrollment, individuals have the option to initiate, discontinue or shift their health insurance policies. Typically, coverage is signed up for at the conclusion of one calendar year for subsequent entire year’s duration.
Open Enrollment: What’s Changing and What You Need to Know
Open enrollment is a period of time during which employees and individuals can sign up for or make changes to their health insurance plans. It typically occurs once a year and lasts for several weeks. During open enrollment, individuals can choose from different health insurance plans offered by their employer or through the marketplace. They can also add or remove dependents from their plan and make changes to their coverage levels. It is important to take advantage of open enrollment to ensure that you have the best possible health insurance coverage for you and your family.
The open enrollment period pertains to health, dental, vision, life, and disability insurance programs offered by your company. If an employee opts out of dental insurance during open enrollment, they will have to wait until the next year’s open enrollment period to enroll in a new dental plan, unless they experience a qualifying life event.
During open enrollment, you have the option to sign up for health insurance or modify your existing plan (if provided by your employer, you may also disenroll if desired).
If you do not sign up for health insurance during open enrollment and do not have a qualifying event, you will have to wait until the following open enrollment period to enroll. If you are eligible for health insurance and apply during open enrollment, the plan must provide coverage. Medical underwriting and proof of insurability are prohibited, as they could make obtaining health insurance more difficult.
How to Navigate Open Enrollment: Tips for Choosing the Best Benefits
Employee benefits and open enrollment are interconnected. Health insurance, retirement plans, and paid time off are crucial components of an organization’s compensation package. These benefits play a significant role in attracting and retaining skilled workers while also enhancing employee morale and productivity.
To avail of these benefit plans, employees must participate in an open enrollment period each year. Open enrollment enables eligible employees to choose or modify their benefit options for the upcoming year. Companies usually conduct open enrollment in autumn for benefits that become effective in January.
During this period, employees assess their current benefit selections, compare costs and options, and adjust their benefit elections for the new year. Open enrollment guarantees that employees can maintain or modify their benefits as required every year. By making open enrollment as uncomplicated, efficient, and informative as possible, organizations help increase employee participation and satisfaction with their benefit plans.
During the open enrollment period, individuals will need to make important decisions regarding their medical, dental, and vision insurance coverage. Additionally, they may have the option to open a tax-advantaged savings account, such as a health savings account or flexible spending account. These choices require careful consideration and should be made with the guidance of a qualified professional.
1- Health Insurance Options during Open Enrollment
During the open enrollment period, you will have the opportunity to select a medical insurance plan that is most suitable for you and your family provided by the open enrollment service provider. The plans available may include a Preferred Provider Organization (PPO), which provides access to a network of healthcare providers. When utilizing in-network providers, costs are typically lower than out-of-network providers. However, some coverage may still be available for out-of-network providers.
Another option is a High-Deductible Health Plan (HDHP), which is often less expensive than traditional health plans. HDHPs offer full coverage for preventative care, with minimum deductibles and out-of-pocket maximums set annually by the IRS. They can also be paired with a health savings account for added cost savings. Lastly, Health Maintenance Organizations (HMOs) offer lower premiums, lower deductibles, and a more limited network of healthcare providers. HMOs often have a network of providers that are limited to a specific geographical area or company.
2- Dental and Vision Areas
You will have the chance to select supplementary plans, including dental and vision coverage. Like health insurance, there will be various plans available at different costs, granting access to diverse levels of care and provider networks. Vision insurance may provide a specific amount of money annually for new glasses or contact lenses.
3-Retirement Plans with Open Enrollment
Employers offer retirement plans as a significant employee benefit. During open enrollment, eligible employees may enroll or modify their retirement plan for the following year. Common retirement plans include 401(k) plans, 403(b) plans, and 457 plans. Employee contributions are generally pre-tax, resulting in tax savings by reducing taxable income. Employer matching contributions are a common feature that motivates employees to contribute. The IRS sets maximum contribution limits each year.
Typically, employees have various investment options within the plan to allocate their contributions. During open enrollment, employees choose their contribution rates and investment options for the next year. Employer materials explain the plan options, limits, investment choices, and fees to assist employees in making informed decisions.
Once benefits enrollment is over, employees usually cannot make changes until the next open enrollment period. Therefore, it is crucial to choose contribution rates and investments carefully. Retirement plans aim to help employees save and invest for a financially secure retirement. By enrolling and contributing early, employees can potentially increase the value of their accounts through investment returns over time.
4- Legal Considerations and Open Enrollment
During benefits enrollment, employers must adhere to various laws and regulations to ensure their benefit plans and communications with employees are legal. Multiple laws affect open enrollment, such as HIPAA, COBRA, ACA, FMLA, ADA, ERISA, and IRC. For health plans, employers must comply with HIPAA rules governing pre existing condition limitations, special enrollment periods, and dependent eligibility. COBRA mandates employers to inform terminated or reduced-hour employees of their right to temporarily keep employer coverage.
The ACA requires employers to provide notice of benefit options and costs to enable employees to make informed decisions. For retirement plans, ERISA governs fiduciary responsibilities and disclosure rules. Employers must follow compliance issues, including verifying employee eligibility, monitoring lifetime and annual limits, providing required notices and disclosures, and securing employee consent where necessary. Non-compliant actions may result in fines, tax penalties, and lawsuits.
5- Wellness Program and Open Enrollment
Wellness programs have emerged as a popular employee benefit with the aim of improving employee health and reducing company healthcare costs. During benefits enrollment, eligible employees are presented with wellness program options and incentives by their employers. Common wellness programs include health risk assessments, biometric screenings, health coaching, gym reimbursements, weight loss competitions, and smoking cessation programs.
The objective of employers is to encourage employees and their dependents to participate in wellness activities that promote a healthier lifestyle. Financial incentives such as gift cards, reduced medical insurance premiums, or contributions to health savings accounts may be offered to employees who participate in wellness programs. Employers distribute materials during open enrollment that explain available wellness programs, required activities, and eligibility for incentives. Employees assess which programs align with their health goals and interests for the upcoming year.
6- Additional Voluntary Benefits
Employers frequently offer additional voluntary benefit plans as part of their benefits package. These benefits are optional and require employees to pay all or most of the premiums themselves. Common voluntary benefits include supplemental health insurance plans like accident, cancer, critical illness, and hospital indemnity insurance. Employees evaluate their health risks and financial priorities to determine if these benefits are worthwhile for the added protection and peace of mind they provide.
Other voluntary benefits include group legal plans and identity theft protection. These benefits aim to provide cost-effective ways for employees to access professional services they may need but cannot afford on their own. During open enrollment, employers highlight the voluntary benefits available and associated premium costs. Employees then decide which plans, if any, would be valuable additions based on their situation. Voluntary benefits offer employees more options to tailor their benefits package to their specific needs.
To Wind Up
Open enrollment solutions offer significant benefits for both employers and employees. For employers, they simplify benefits administration, reduce costs, and enhance employee satisfaction and retention. For employees, open enrollment through a benefits enrollment company simplifies the process of selecting and enrolling in benefits.
These solutions furnish the necessary information and tools to select the best options based on individual needs and budgets. When implemented effectively using best practices such as gathering feedback and reviewing analytics, open enrollment solutions can help optimize the value of benefit plans for all stakeholders. With careful planning and communication, the open enrollment period becomes an opportunity to engage and motivate employees for the year ahead.