Are You Ready for Open Enrollment Season?

August 29, 2017

Open enrollment season is once more upon us, an always hectic time made more fraught by costs that continue to rise.

But it’s more than that. The open enrollment period is an important opportunity for employers to demonstrate the investment they have made in their employees. It’s also a good time to remind them about your company’s health and wellness management and retirement planning programs.

Not to be obvious, but preparing for open enrollment is critical. Time ahead of open enrollment should be dedicated to reviewing voluntary benefits options, along with the ins and outs of your primary health, dental and vision plans.

Why? Well, two bottom-line reasons:

First, a study by the National Bureau of Economic Research found that 63 percent of the 50,000 employees it surveyed at Fortune 100 companies selected a health plan that was not their most cost-effective option. In other words, your employees could well need your help to make better decisions on their health plans.

Secondly, you’ll need to be sure you invest time up-front simply because employee benefits have evolved from plain vanilla to 31 (or more) flavors. As competition for employees increases, workers are demanding more from their employers. Benefits that were once considered add-ons are now considered mandatory.

If you’re shopping for a company health plans, remember that the law requires all plans to cover 10 essential benefits. These are:

1. Outpatient care including chronic disease management
2. Emergency care
3. Hospitalization
4. Pregnancy and newborn care
5. Mental health and substance abuse services
6. Prescription drugs
7. Rehabilitation services and devices
8. Lab tests
9. Preventive and wellness services
10. Dental and vision care for children

Costs, as we know, are always climbing. According to the National Business Group on Health, employers project that the total expense of providing medical and pharmacy benefits in 2018 will rise 5% for the fifth consecutive year.

Including premiums and out-of-pocket costs for employees and dependents, the overall cost of health care is estimated to be $13,482 per employee this year, and is projected to rise to an average of $14,156 in 2018. Employers will cover nearly 70% of those costs, leaving employees to bear about 30%, or nearly $4,400 in 2018.

With all that in mind, here are three mistakes to avoid to help your open enrollment period be a success.

1. Failing to communicate. Eighty percent of employees say that a well-communicated benefits package would make them less likely to leave their jobs. Yet multi-generational workforces can present communication challenges for employers.

Some baby boomers still prefer information about their health plan options through post cards, flyers or posters in the workplace breakroom. Generation X tends to prefer email, and many millennials like the convenience of text messaging and social media. Carriers increasingly emphasize electronic benefits education and enrollment. All things considered, it’s a simpler approach that is less prone to copying and data-entry errors. It would be a mistake, however, to believe that the high-tech option is the first choice of every employee.

Be sure to offer the options of old-fashioned paper documents, phone registration and face-to-face meetings. One good compromise is an on-site enrollment kiosk where a real person provides electronic enrollment assistance.

2. Starting too late. Most companies should begin communication campaigns 60 to 90 days before open enrollment starts, although larger companies may need to start earlier. Companies with remote workers should also start earlier, because they don’t have the option of using in-person communication to spread the word. The industry standard for the open enrollment period is 30 days; most small to mid-size companies still hold it in November.
3. Incomplete documentation. Under federal law, an employer that provides certain benefits to its employees is considered to have established an “employee welfare benefit plan.” Such plans must have a written plan document containing all the terms governing the plan. A written contract of insurance with an insurance company does not normally contain all the rules required by law and is therefore not a plan document. A well-drafted plan document typically specifies things such as eligibility requirements, plan participation rules and the length of coverage. It also contains important statements by the employer such as the employer’s right to amend or terminate the plan at any time.

Also, the Affordable Care Act requires employers who self-fund employee health care to report information about minimum essential coverage to the IRS, at the risk of penalties. Even if a company is not required by law to offer compliant coverage to part-time employees, it still is responsible for keeping detailed records of their employment status and hours worked.

Storma McMurry is an Employee Benefits Account Executive at CCIG. Reach her at stormam@thinkccig.com or 720-212-2069.

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