Benefits enrollment refers to the time period when employees can enroll in or make changes to plans and services offered by a company. This enrollment period relates to most workplace benefits you offer, including health, vision, dental, life and disability, HSA (health savings account) and FSA (flexible spending account) plans.
When Does Benefits Enrollment Occur?
Benefits enrollment occurs at one of three stages:
During Open Enrollment
Open enrollment is an employee benefits enrollment period that occurs annually, usually toward the end of the calendar year. During open enrollment employees can enroll in new benefits, confirm existing benefits or make changes.
During Employee Onboarding
A new employee will go through initial benefits enrollment during onboarding and benefits will start after meeting the time threshold outlined by the company
As a Result of a Life Change
An employee who has what’s called a “qualifying life event” can make changes to their benefits outside of the open enrollment period. Qualifying life changes include marriage, divorce, birth or adoption of a child or losing other health coverage.
About Open Enrollment
Open enrollment, the annual period of time in which employees can make changes to their benefit plans, can be a busy time for human resources departments and a confusing time for employees. Here are some tips to help make your open enrollment go more smoothly.
Prior to Open Enrollment:
Partner With Plan Administrators
Plan administrators are a great resource to use, especially prior to and during open enrollment. Often they can provide you with tools and resources to help communicate changes and instructions in order to help facilitate the open enrollment process.
Utilize Automation Tools
In today’s world, gone are the days of paper forms. Benefits automation tools can be lifesavers to HR departments and put much of the electronic paperwork in the hands of the employees with easy-to-use platforms that help with efficiencies and reduce errors.
Well before open enrollment, review your employee benefits plans and see if any changes need to be made. Many employers send out a benefits survey to employees to assess their satisfaction with benefits and help ensure the company is providing what employees need and want. Not only can this help with overall employee satisfaction, but it can be a factor when recruiting new talent as well.
- Have employee needs changed? Do you have an aging workforce, or more young people having children? It might be time to look at new benefits more tailored to these age groups.
- Have your company needs changed? Are you finding it difficult to hire quality employees and could it be because of your benefits package?
- What are employees saying about your benefits offerings? The results of an anonymous employee survey can help gauge the level of satisfaction with your current plans and provide insight into any additional benefits you might want to consider.
- What are other companies doing? Look at other successful companies similar in size and revenue – what benefits do they offer? Often you can find out what employees think of their employer’s benefits packages on sites like Glassdoor.
Be Clear With Communication
While benefits terms might be second nature to a human resources professional, the average employee may not be as familiar. Providing employees with simple, straightforward and clear explanations of the benefits your company offers and the choices employees have can cut down on questions your department has to field.
Communication prior to and during the open enrollment period doesn’t have to be limited to brochures via email. Infographics, videos, webinars and benefit fairs can often help round out a well-planned open enrollment period. Provide employees with the information they need plus the resources to further explain the materials and the opportunity to ask questions and get clarifications.
Give Employees Enough Time – But Not Too Much Time
While the federal open enrollment period is 45 days long, many companies have an open enrollment season of two to four weeks. For calendar-year benefit plans starting Jan. 1, open enrollment often takes place in November.
If you’ve provided good communication and the proper materials prior to the open enrollment season, your employees may be in a better position to expedite their own open enrollments during this time frame. Of course, giving too much time may cause employees to wait and forget; in which case you may be left hunting down the stragglers and sending countless reminders.
Key Benefits to Explain
Some employers tend to overlook explaining basic health insurance, but it can be confusing. Consider providing explanations to terms related to health insurance like premiums, co-pays, deductibles, out of pocket maximums, qualified medical expenses, a preferred provider organization (PPO) versus a health maintenance organization (HMO) and prescription drug coverages. Offer examples and scenarios that your employees can relate to, such as individual and family coverage scenarios, so they can make the best decisions for their situations.
Dental Insurance and Vision Insurance
Often overlooked by employees, dental and vision insurance can come in handy, especially if younger employees have children who need braces or older employees are moving toward bifocals or trifocals. Again, examples and scenarios, such as the cost comparison between cleanings and fillings with dental insurance versus without will help employees make decisions right for them.
High Deductible Health Plan (HDHP)
More companies are making high-deductible health plans (HDHPs) an option for employer-sponsored health coverage. These plans have higher deductibles than a traditional insurance plan with a lower monthly premium. A high deductible plan (HDHP) can be combined with a health savings account (HSA), allowing employees to pay for certain medical expenses with money free from federal taxes.
While HDHPs can save companies a lot of money in premium costs, some employees shy away from them due to the potential of large out-of-pocket expenses and the perceived complexities of managing an HSA. Companies can mitigate these concerns by educating their employees and reviewing their deductibles for HDHPs.
Health Savings Account (HSA)
Health savings accounts (HSAs) may be opened by employees who enroll in a high-deductible health plan. Employees can put money in an HSA up to an annual limit set by the government, using pre-tax dollars. HSA funds may be used to pay for medical expenses regardless of whether the deductible has been met, and no tax is owed on funds withdrawn from an HSA to pay for medical expenses. In order to make HSAs more attractive to employees, some employers offer contributions to employee health savings accounts, either as a match or incentive, such as not smoking or participating in biometric screenings.
Flexible Spending Accounts (FSA)
Flexible spending accounts (FSAs) allow employees to set aside tax-free dollars for use throughout the year on qualified expenses, reducing out-of-pocket costs. There are minimal expenses to the employer providing the benefit and they offer tax savings that offset the minimal costs.
The three types of FSAs include:
- Health Care FSA: Funds can be used for co-pays, deductible expenses, dental and vision expenses, prescription drugs, and some over-the-counter health care items for the employee and their dependents.
- Dependent Care FSA: Funds can be used for eligible dependent care services, such as preschool or daycare, summer day camp, before or after school programs and child or adult daycare.
- Transportation FSA: Funds can be used for work-related commuting, which also includes parking costs.
Short-Term Disability (STD) and Long-Term Disability (LTD) insurance plans are the most common plans offered by employers; however, long-term care insurance, workers’ compensation insurance and paid leave programs also fall under the umbrella of disability insurance.
- Long-term care insurance is designed to provide coverage for chronic illnesses and disabilities that are treated outside of a hospital when a person can no longer care for himself or herself because of prolonged illness or disability.
- Critical illness and supplemental insurance policies provide employees with a fixed, lump-sum payment following the diagnosis of a specific illness as outlined in the policy. “Cancer” policies are popular, but other illnesses, for example, stroke, heart attack and kidney disease, can be covered as well.
- Workers’ compensation is a system of benefits provided by law to most employees who experience work-related injuries or occupational diseases.
Most employers offer group-term life insurance as an employee benefit, although other types can be offered. Term insurance is life insurance that is in effect for a certain period of time only. Generally, in the case of employer-provided term life insurance, the term is for as long as the employee is employed.
Most group-term life insurance policies offer either a set amount of insurance or are based a number times the employee’s salary. In some cases, employees can purchase life insurance in increments based on their age.
In addition to group life insurance, other types of insurance you can offer include:
- Group accidental death and dismemberment. Commonly known in the industry as “AD&D,” this coverage pays benefits to the employee’s beneficiary if death occurs due to an accident or if the employee loses use of portions of the body (loss of one arm and leg, for example, may result in payment of a percentage of the total benefits).
- Business travel accident insurance. This insurance covers the death of the employee while traveling for work.
- Split-dollar life insurance. This life insurance pays the employee’s beneficiary when the employee dies and returns the premiums paid to the employer. The insurance is paid by both the employer and employee and has a substantial investment element to it.
Mental Health Benefits
In a 2021 employee wellbeing report, WebMD found that 60 percent of people said their employers were not giving them “enough support towards good mental health.”
Of those respondents, 70 percent shared that they want on-demand access to coaches/services to address anxiety, depression and stress—and over half of them said they need guidance, and direct benefits, around caring for a young child and/or aging relative.
Mental health benefits to consider include:
- An online, app and/or telehealth component
- Addiction/substance abuse treatment and programs
- Employee Assistance Programs (EAP), that offers free and confidential assessments, short-term counseling, referrals, and follow-up services to employees who have personal and/or work-related problems. EAPs can also offer legal services, identity theft restoration assistance, eldercare assessment, childcare assistance and more.
Voluntary benefits are services that an employer offers at a discounted group rate but are paid for (either fully or partially) by an employee. Voluntary benefits can include:
- Employee Assistance Programs (EAPs)
- Wellness programs
- Financial wellness benefits, such as financial planning, budgeting, retirement planning and investment advice
- Pet insurance
- Travel accident insurance
- Flexible work hours/locations
Retirement benefits are often overlooked during open enrollment since changes retirement plans can often be made year-round. But open enrollment can be an opportune time to remind your employees about their retirement planning efforts, like setting up a 401(k) plan or increasing contributions on a pre tax basis. In addition, those employees over 50 can also make catch up contributions up to a certain amount per year.
Open enrollment can be an extremely busy time for human resources professionals, but doing legwork year-round, including talking to plan administrators, researching other companies’ plan options, surveying your employees and equipping them with the proper materials and communication can help the process go much more smoothly.
Open enrollment can be confusing- but we’re here to help. At Higginbotham, we offer personalized service that makes insurance easier and more efficient. Talk to an employee benefits specialist.