Health insurance companies offer group participants a limited amount of time each year to make changes to their group health plan. That period of time – typically one to two months per year, is called “open enrollment.”
Why open enrollment? Open enrollment periods are important for helping to control an insurance industry phenomenon called “adverse selection.” This occurs when people wait until they are actually sick to purchase insurance. When this happens, it drives up premium costs for the entire group and makes group insurance plans unworkable. By limiting eligibility for plan changes to certain times during the year, workers have an incentive to enroll in plans right away. This is an important measure to take – especially for group plans with guaranteed underwriting. This keeps costs down for plan participants and sponsors alike.
Employer Responsibilities. As a plan sponsor, you have certain responsibilities prior to and during your open enrollment periods:
- Take reasonable steps to alert your workers to the open enrollment period well in advance. Examples of reasonable steps include emails, employee newsletters, public bulletin boards, and notices included with paychecks.
- Provide plan information. You should ensure that you distribute specific information about your various plans to your employees well in advance of the open enrollment period.
- Maintain minimum enrollment levels. Most plans require a certain percentage of eligible employees to enroll in the plan – typically 50% to 75%. This is not usually a problem, as long as employers educate their workers about their available health plan options and encourage them to enroll.
- Provide necessary enrollment documents. Your insurance carrier can help you with this effort by providing you with the number of enrollment packets you anticipate you might need.
- Safeguard Personally Identifiable Information. Plan sponsors might occasionally have access to sensitive information about workers’ medical information. It is a violation of federal law to compromise this information in any way.
Employee Responsibilities. Your employees also have responsibilities:
- Educate themselves. Your employees should take the time to learn about the various options in the plan, including co-pays, deductibles and exclusions.
- Take advantage of initial or open enrollment eligibility periods.
- Enroll in COBRA, if they are eligible and require continuing coverage after leaving your work force.
- Enroll family members, either during open enrollment period or during their initial eligibility period as new hires. If they fail to enroll during one of these periods, they cannot go back and add family members to the plan, but must wait until the next open enrollment period.
Our responsibilities. Our customer relations staff and agents stand ready to help you meet your responsibilities in preparing for your open enrollment period. Specifically, we can help you with enrollment forms, brochures and fact sheets, and answers to your plan-related questions. For more information, please don’t hesitate to contact our office.