How To Survive Open Enrollment
A survival guide for the open enrollment period when your health insurance plan renews.
Helpful Tips and Pointers
As your experienced group employee benefits broker with over 20 years navigating New Jersey renewals, we want to provide a quick "how to" on renewals and open enrollment to make sure things go smoothly on your end.
Let’s Start with Your Insurance Plan Renewal
Every year at the same time (depending upon when you started your first insurance plan offering), your fringe benefits including medical insurance, dental insurance, vision insurance, and other ancillary insurance as well as voluntary insurance plans will come up for renewal. That means the carrier can change the plan itself and the premium prices usually get reset at this time. It is no secret that premiums go up year over year.
The renewal rates are always available 45 days before the renewal, but sometimes we can get them before that. We then work together to decide whether the renewal is acceptable or we want to shop the market.
You will work with your group employee benefits broker (that’s us) to get the renewal terms and to shop quotes from other carriers to compare plans and pricing. In many cases, a change in carriers will help to keep costs level or to mitigate rate increases.
Pro-Tip: We need to talk about affordability if you are covered by the Affordable Care Act. Employers with 50 or more employees are required to offer “affordable” insurance plans to employees. This is a calculation we will help with and as rates go up, so do the employer contributions to keep medical insurance affordable.
What is Required for Renewals?
It can be data and paper heavy. We will help you to get the right data if you would like us to have access to your payroll system. The first thing we need is an employee census.
The census is demographic information about your employees and their dependents. Many times, employers don’t have ready information regarding employee’s families and dependents, so that can be difficult.
Pro-Tip: Use an online survey tool to gather information about your employees’ dependents. Be sure to use a secure program if you are gathering sensitive information and ensure that it is HIPAA compliant. If you don’t need sensitive or protected information, then a simple survey tool will do.
Large Group or Small Group?
In New Jersey, as in many states, employers are categorized as either large group or small group plans. The threshold is 50 employees. More than 50 employees is a large group.
Small group employers get pooled and the plans and rates are the same for all. There is some flexibility in carriers and plan options, but the plans are accepted and set by the state annually. Premiums are also age-rated, meaning every member is billed based on their age. That goes for the employee and each of their dependents.
Large groups have more flexibility in that they can negotiate with carriers. However, participation rates, the health of the group, and the history of insurance usage known as “experience” will all play into the pricing and the negotiating power of the employer.
More Data and Paperwork
Depending upon the size of the group, there are different requirements from different carriers. Some of the often requested information or documents include: WR-30’s, recent experience, employee questionnaires, group certification, and employee waivers for those who are not on the plan.
Of course, we will work with you to get all of this to ensure a smooth transition. We do this all the time, so we know what to do from the outset and we guide the process the whole way for you. Wherever we can, we will be proactive and come onsite to help you.
What Is Open Enrollment?
The Actual Open Enrollment is for Employees
After you have decided on the plan you will offer, open enrollment is usually during the 30 day period before the new health insurance plan renews or changes. For the employees, open enrollment is their once-a-year opportunity to evaluate their current elections, check if their doctors and prescriptions are covered within the changes under each plan, confirm their dependents are enrolled, and select benefits for the upcoming year.
The typical open enrollment period will be 1-2 weeks of their undivided attention.
If an employee misses open enrollment for their pre-tax medical, dental, vision, life, or other voluntary supplemental insurance, they will have to wait until the next year’s open enrollment 12 months later.
The Open Enrollment Process
It's time to think about your open enrollment communications to employees. This includes details on each plan offered, any changes in benefits from the prior year, premium rates, payroll deductions if applicable, and instructions on how to enroll or make changes. I suggest a multi-channel approach - email, paper flyers, intranet postings, even posters in breakrooms.
Pro-Tip: Send emails to employees announcing open enrollment to both their personal emails and their work emails. Not all employees check both. There is also the matter of spouses who either get involved or want to be a part of the decision making. Sending to personal email facilitates this.
Be sure to get across the employee that this is their only opportunity to make changes to insurance plans unless they have a qualifying life event during the plan year.
Pro-Tip: Electronic enrollment is often an option either through the carrier or through a payroll system that you pay for. It takes some setup, but electronic enrollment for medical insurance puts employees in the driver seat. They can log on and use self-service for choosing their plans and/or waiving coverage.
If we are using an electronic enrollment, employees just need to submit their elections through your enrollment portal. If there is no electronic option with the carrier, paper applications may need to be submitted.
On our end, we will be prepared to collect any necessary documents from employees should they enroll spouses or dependents. Keeping track of all elections with a spreadsheet is our preferred method if it is not an electronic enrollment. and communicate closely with your carrier rep to set up payroll deduction files reflecting the proper premiums.
Pro-Tip: Get waivers. Whenever you offer an employee fringe benefits and they do not take them, you should have the employee sign a waiver documenting that they were offered and why they did not take it. This is often because they have other coverage through a spouse, parent, or other employer. You will want the documentation to prove you did not discriminate in offering the plans.
In Summary
I know open enrollment feels daunting, especially when there is a time crunch; but we've done this many times together with our clients. Lean on our expertise so you can confidently guide your team. My advice - give us the reights, communicate clearly, and we'll get through this smoothly!
