Q: How Does Open Enrollment Work?

Open enrollment is the annual period when employees can make changes to their health insurance plans

During open enrollment, employees can enroll in your company’s health insurance plan, switch to a different one, or drop their existing plan. Typically, this enrollment period applies to the health, dental, vision, life, and disability insurance plans your business offers. 

For example, if your employee elected out of dental insurance during open enrollment, they need to wait until the following year’s open enrollment period to register for a new dental plan, unless they have a qualifying life event, called a QLE. (We’ll get into QLEs later in this piece.)

When is open enrollment for health insurance?

The HealthCare.gov open enrollment period generally runs from November 1 to December 15 every year, although your state’s specific time frame may be different, depending on whether you live in a state with a state-run exchange. 

This list of 2021 open enrollment dates provides an overview of deadlines for state-run exchanges.

For group health plans, the open enrollment period varies.

The 2021 open enrollment dates for employer-sponsored group plans may differ depending on your company’s calendar and your health insurance provider. For instance, you may have open enrollment at the end of your fiscal year, not the calendar year. 

To find out your open enrollment dates for 2021, ask your health insurance broker.

When is open enrollment for FSAs, HRAs, and HSAs?

If your employees want to register for a flexible spending account (FSA) or health reimbursement arrangement (HRA) account, they also need to wait for open enrollment—and the timing may be different than the enrollment period for your health plan. 

FSAs and HRAs sometimes have separate plan years than group health plans, which means employees may have to go through one enrollment period for the group health plan and another for FSAs and HRAs.

However, employees are eligible to enroll in a health savings account (HSA) at any time throughout the plan year as long as they’re enrolled in an HSA-eligible plan and can make updates to their contribution throughout the year.

Here’s how the enrollment periods for FSAs, HRAs, HSAs, and health insurance compare:

BenefitWhen employees can sign up
Health insuranceHealth insurance open enrollment
FSAFSA open enrollment
HRAHRA open enrollment
HSAIf they’re enrolled in an HSA-eligible plan, any time

What do I need to do to prepare for open enrollment?

Before your employees start evaluating their options, consider reviewing your group health plan offerings to see if they fit your employees’ needs in terms of quality and affordability. 

If you already offer health insurance, check your plan’s renewal period. That’s the ideal time to conduct an audit of your current plan.

During your renewal period, think through the following questions:

  • Have your medical, dental, or vision plans changed? If so, is the change positive (more coverage, better cost, etc.) or negative?
  • Have your employees’ needs changed? For example, do you have more families on your team? If that’s the case, what other benefits would help them out?
  • Have your needs as a company changed? Say you’re having trouble with hiring, stepping up your benefits package is one way many business owners stay competitive.
  • Is your team satisfied with your current health insurance plan? If you don’t know off the bat, an anonymous employee survey may help you get a sense of how people are feeling.

You can either work with your broker or carrier to find a better plan—or keep the one you’ve already got. Keeping your current plan is called a renewal. If you don’t want to renew your current plan, your carrier will propose a new plan instead.

To help your employees make educated choices during open enrollment, they should understand:

  • Any changes to their coverage or the available plans
  • Any changes in their costs
  • How to make changes if they would like to select a different plan

In addition, the government may require you to provide specific notices to your employees during the open enrollment period. Those notices include: 

  • Wellness program disclosure, which is required if your program offers a wellness program—like giving employees a discount if they exercise a certain number of times—and the plan materials must describe the terms in detail. The plan materials also need to outline a reasonable alternative (or waiver) for employees who are physically incapable of meeting the standard. (If your plan materials simply state that you have a wellness program, you don’t need to include this.)
  • QSEHRA mandatory notice, if you offer QSEHRA to your workers, you are required to provide every eligible employee with a written notice at least 90 days before the program starts. 
  • WCHRA (Women’s Health and Cancer Rights Act) mandatory notice, which is required if your plan offers mastectomy benefits. 
  • Employer Notice regarding Premium Assistance under Medicaid or CHIP (Children’s Health Insurance Program), which is required if your state provides CHIP or Medicaid premium assistance.
  • Grandfathered Plan Disclosure/Notice, which is required if your health care plan is grandfathered, or purchased before March 23.

Your state may also require you to provide other open enrollment notices. Your health insurance plan carrier or broker can help you determine what your employees need to know. 

How does open enrollment impact payroll?

Your employees’ choices during open enrollment directly impact their pay—and, by extension, payroll. 

For example, if an employee switches to a more expensive plan, you’ll need to withhold more from each paycheck. If your payroll provider also helps you manage employee benefits, you may be able to skip this step. 

Once your employees make their picks, you’ll need to update payroll and inform your plan provider of any new enrollments or changes. 

What happens if my employees miss open enrollment?

If an employee is on vacation or just forgets to sign up, they may be wondering how to get health insurance after open enrollment has passed. Most carriers allow a 30-day grace period after open enrollment to update selections.

If your group is still within this period, your employees can confirm with your carrier that they are still able to make changes. If they’re outside this window, your employees can still sign up for health insurance during a special enrollment period, which occurs after a qualifying life event, or QLE. 

Having a child or getting married are common examples of QLEs that will trigger a special enrollment period

QLEs are generally broken into four areas:

  • Updates to your place of residence, also known as moving. The Affordable Care Act (ACA) defines moving as a QLE if your zip code or county changes. 
  • Updates to your household, like getting married or having a child
  • Losing health insurance, like when you change jobs or turn 26 and no longer qualify for your parents’ coverage
  • Gaining health insurance through a spouse’s plan or employer.

If any of the above has happened to your employees, they’ll have at least a 30-day window after their QLE to enroll in another health insurance plan that better suits their needs. However, your plan may allow up to 60 days to make these changes.

Generally, your employees can’t make any changes outside of open enrollment or qualifying life events—including adding their spouse or kids when those additions are not QLEs. 

Open enrollment for 2021 can seem overwhelming, but with careful planning and communication, you and your employees will be able to make the best decisions for your situations. 

This post was originally published on October 29, 2019.

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