Employee Benefits: Key Issues and What Happens When Open Enrollment is Missed

Offering employee benefits is a crucial element and investment in hiring and retention. CFOs, finance directors and those involved in human resources (HR) capacities need to keep a close eye on the management and administration of benefits to ensure employees are enrolling and taking advantage of what’s available to them.

What is an Open Enrollment Period?

Open enrollment is a designated time when employees can review and choose the health benefits that work best for them and their families. These benefits often include options like vision, dental and healthcare coverage.

New hires typically have a 30-day window to enroll in the company’s health plans. For existing employees, changes to benefits can be made during the annual open enrollment period, typically two to four weeks in the fall, or after a qualifying life event.

Who Can Participate in Open Enrollment?

Eligibility for health benefits during open enrollment depends on the type of employees hired. Full-time, part-time and contract workers may all be eligible, depending on the company’s offerings and needs. For smaller businesses or startups, it might make more financial sense to provide benefits exclusively to full-time employees.

Qualified employees can enroll them­selves and their immediate family members in the provided benefits.

Who is Responsible if an Employee Misses the Open Enrollment Period?

All employers have certain responsibilities to notify employees about benefits-related deadlines; however, employees are respon­sible for registering for benefits and com­pleting any required paperwork. Employers should make employees aware of what happens if they miss open enrollment.

Options for an Employee Who Missed Open Enrollment at Work

The most common option for employees who missed the 30-day enrollment period is to wait until the next enrollment period to register for benefits. In some circumstances, employees may be granted a special exception that allows them to retroactively register for benefits outside the standard enrollment window.

• Special Enrollment Period (SEP): The SEP allows employees to update or change their insurance plans outside the regular enrollment window. This is avail­able when a qualifying life event occurs.

• Affordable Care Act (ACA): If an employee misses open enrollment, they may be eligible to apply for health insurance through the Health Insurance Marketplace®.

• Medicaid/CHIP health coverage: If an employee experiences a decrease in income, they may be eligible to apply for health coverage through the government’s Medicaid and Children’s Health Insurance Program (CHIP).

• Short-term health insurance: Individuals who are in transition may qualify to register for a short-term insurance plan, if offered in their state.

How Can Employers Prevent Employees from Missing Open Enrollment?

Missing open enrollment can be a costly mistake for employees. Employers can take the following simple steps to ensure a successful open enrollment period:

• Require waivers of coverage. Waiver of coverage documents verify that em­ployees reviewed and declined benefits options during the open enrollment period. These waivers also protect an employee’s ability to immediately enroll for benefits if they lose coverage from an outside health plan, such as a spouse’s employer.

• Providing adequate notices. Giving employees multiple notices surrounding open enrollment can ensure that they are aware of the deadlines and have ample opportunity to complete their enrollment. Consider giving pre-open enrollment notifications and reminder notifications to all employees.

• Regularly educate employees. Providing multiple information channels during open enrollment can ensure that employees are well-informed and have the resources to make decisions about their benefits.

• Ask for employee feedback. Employees can be a great resource for offering suggestions about the best ways to structure benefits enrollment to ensure maximum participation.

Starting the conversation about open enrollment early and providing multiple information channels throughout the open enrollment period can help ensure that employees don’t miss out. If your HR team is overloaded, using trusted HR consulting services can help lighten the load and provide extra support to employees through open enrollment.

Access the full article on open enrollment at paychex.com/articles/human-resources/employee-misses-open-enrollment.

Paychex is an NJCPA member benefit provider. Learn more at marketplace.njcpa.org/listing/paychex.