Fall is usually the time for open enrollment - when employees make their benefit selections for the coming year. The process gives employees an opportunity to choose or change their benefits (such as health insurance, life insurance, vision, and dental). Given the complexity of many insurance programs, employers and employees often have questions about open enrollment. To help make the process as smooth as possible, here are some tips to consider:
#1: Consider coverage through SHOP.
Small employers that have not already selected a plan can consider obtaining their health coverage through the Small Business Health Options Program (SHOP). SHOPs are intended to give small businesses some of the advantages that large employers have historically experienced such as greater purchasing power, the ability to pool risk, and more choices among health plans. Additionally, small employers that offer coverage through the SHOP, and meet other criteria, may be eligible for the small business health care tax credit. Visit healthcare.gov for more information.
#2: Communicate early.
After you've selected your plan(s), notify employees that open enrollment is coming. Summarize benefits choices and any changes from the previous year so that employees can start to think about their options. Consider bringing in a representative from your insurance company to talk about your benefits plan, or refer employees to your insurer's website for more information. Finally, look at the questions you've received from employees in the past. Consider developing a Q&A document that answers frequently asked questions. Choosing a benefits plan isn't always easy for employees, so use plain, easy-to understand language whenever possible.
#3: Encourage an active role.
Instead of just rolling over the previous year's selections, encourage employees to review benefits options carefully. Instruct employees to take into account past usage and to select the option that best fits their current needs. Remind employees that their benefit elections (or lack thereof) will generally remain in place for an entire year. This means that if their choice is too expensive for their budget or doesn't meet their needs, they will generally have to wait until the next open enrollment period to make changes.
#4: Highlight the value.
Explain how the benefits you provide contribute to employees' total compensation (their base pay plus the value of company provided benefits). Additionally, let employees know how they can reduce their own benefit costs. For example, if you offer incentives for participating in a wellness program, let employees know how they can participate and any rules related to the program.
#5: Prepare for ACA reporting.
Beginning in 2016, the Affordable Care Act (ACA) requires insurers, small employers with self-insured (including level-funded) health plans, and all large employers (those with 50 or more full-time or equivalent employees) to report certain information about health insurance to the Internal Revenue Service (IRS) and provide covered individuals with an annual statement. The IRS will use the information to enforce the ACA's health insurance mandates (for individuals and employers) and to administer premium tax credits. (Note: These reporting requirements will be covered in an upcoming Tip of the Week). Consider using open enrollment as an opportunity to notify employees that they will be receiving the annual statement starting in 2016 and what they need to do with the information (use the statement to prepare their 2015 taxes).
#6: Refer to the Summary of Benefits and Coverage (SBC).
The ACA also requires health plans to provide an SBC and make available upon request a uniform glossary of terms commonly used in health insurance during open enrollment. The SBC must be provided no later than the first day of open enrollment and included in any written enrollment materials. For self-insured and level-funded plans, the employer is responsible for preparing the SBC. Employers with fully insured plans should coordinate with their insurance company to ensure that the SBC is provided. Instruct employees to review the SBC for questions about deductibles, out-of-pocket expenses, and the costs and limitations associated with various types of medical events.
Conclusion:
Employee benefits are a great way to attract, retain, and motivate employees. Prepare for open enrollment season in advance to help guide employees, encourage active selection decisions, and increase employee morale.