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Surviving Open Enrollment: A Four-Step Health Insurance Guide for Small Businesses

ByJason Hargraves,
business.com writer
|
Nov 29, 2019
Thekopmylife / Getty Images
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Open enrollment is a time of year when employees can choose, drop or change their employer-sponsored health care coverage.

  • Open enrollment is a few week period at the end of the year when employees can elect, drop or change their employer-sponsored healthcare coverage.
  • Small businesses with fewer than 50 full-time employees aren't necessarily required to pay into group health insurance premiums.
  • Small businesses that do offer plans through the Small Business Health Options Program enjoy the Small Business Health Care Tax Credit.

As far as fall rituals go, the health insurance "open enrollment" period is right up there with raking wet leaves and paying property taxes. If this isn't your first time around the block as a business, you already know that earlier is better when it’s time to get the word out and meet what always turns out to be a rocket speed-approaching deadline.

Here are the basics for 2019 and what small business owners need to know.

Do small businesses have to offer health coverage?

Not always. If you're a business with fewer than 50 full-time employees, you aren't required to pay a percentage of group health insurance premiums – but many small organizations opt to do it to stay competitive.

Things have changed with the Affordable Care Act: A mandate fining individuals without health insurance was removed in 2019. But the ACA still requires employers with 50 or more full-time employees to offer health insurance coverage. Regardless, it's still a good idea to offer a plan given the tough climate for finding and retaining good workers.

An added bonus to offering coverage is that small companies who sign up for plans through the Small Business Health Options Program (SHOP) can take advantage of the Small Business Health Care Tax Credit. If all criteria are met, this tax credit is worth up to 50% of the costs a company pays for employee premiums, according to the healthcare.gov website.

Because the SHOP program is not available in all areas, many small businesses obtain plans through an insurance company, broker or online seller.

Employers with businesses of certain sized must offer affordable, minimum essential coverage to their full-time employees or potentially face the employer shared responsibility penalty, according to G&A Partners, a professional provider of human resources outsourcing.

Always document the coverage offered. You can require employees to sign either an acknowledgment of benefits form for those who opt in to coverage, or a waiver of coverage form for those who opt out or miss the deadline to enroll in employer-based benefits packages.

Editor's Note: Are you looking for help with your company's HR and health insurance offerings? Consider a PEO. Fill out the survey below to have PEO providers contact you with quotes and more details.

 

What is open enrollment?

Open enrollment is a short time frame – usually only a few weeks – when employees can choose, drop or change their employer-sponsored healthcare coverage. In the individual market, you can drop coverage at any point during the year, but this is not so for most company-based health insurance.

If the benefits begin Jan. 1, open enrollment likely takes place in November. The open enrollment window is usually anywhere from two to four weeks, but for many HR managers trying to get forms returned and questions answered, it can seem much shorter.

A four-step guide to open enrollment

Once you've got your plan in place and enrollment period established, the work doesn't end, because you should now get employees informed and signed up. Follow these four steps to get through the process. 

1. Get the word out about open enrollment as soon as possible.

Employers aren't accountable for employees who miss the open enrollment deadline, according to guidelines from the U.S. Department of Labor. But if an employee does miss out, it could become your problem in more ways than one.

Frustration, low morale and turnover is clearly something employers want to avoid. A 2018 study by insuranceQuotes.com found that 41% of Americans are unaware of when the open enrollment period occurs and what's entailed. So how do you get the word out?

  • Use face-to-face reminders.
  • Post fliers and posters in your office.
  • Send emails and make calls to get the message across that open enrollment happens for a short window of time.

Top human resources professionals recommend that companies consider using an employer benefit communication portal, brief educational videos, webinars on specific benefit topics and face to face meetings. The more engaging and interactive, the more effective your employees will find it. [Need help with your open enrollment and health insurance offerings? Consider signing up with a PEO. Check out our best picks and reviews.]

2. Keep it simple

Reading through pages and pages of insurance-related jargon is a task that will quickly make its way to the bottom of anyone's to-do list. If you want employees who are already plenty busy with their jobs and personal lives to learn about and respond to a benefits package, do the homework for them? Give them the key information in an easy-to-understand format or a live presentation that's not too bogged down in details. 

Keeping the information simple means avoiding jargon and non-vital information, providing timelines and side-by-side comparisons of packages. Give employees at least a three-week window during open enrollment, and certainly, don't hide the monthly costs in pages and pages of text. It's important to summarize and communicate the value of the company's total compensation. This is also cost-effective for the company, so they can ensure employees are utilizing their benefit plans and they are not wasting money.

Breaking down all the key information and doing the research for your employees will go a long way toward reducing procrastination and encouraging more people to sign up for a plan in a timely fashion.

3. Plan for questions

During open enrollment, it's not unusual for human resources staff to block out and reserve hours of time just to respond to employee questions about their health plans.

It's not a bad idea to hold a special luncheon or meeting to address some of the more frequently asked questions. If you've got only a handful of staff, brief one-on-one meetings to address each employee's questions and concerns will help speed the decision-making process for them.

To save time, you might also consider a frequently asked question session at the beginning of the enrollment period. Some questions you can count on employees asking include:

  • When is the final deadline to sign up for healthcare?
  • What happens if I miss open enrollment? 
  • Have my premium gone up? If so, by how much?

4. Keep communication open all year.

For those who miss the deadline, there's not a whole lot that can be done unless he or she qualifies for a special enrollment period.

A special enrollment period is just what it sounds like – if you've had a life-changing event such as marriage, the birth or adoption of a child or lost other coverage, the employee should be able to meet the qualification standards. 

Experts advise holding in-person meetings with employees who miss the enrollment deadline to hear their concerns, get feedback on the process and to ensure you will let them know as soon as open enrollment comes around next year. It's also a good idea to update employees throughout the year on what's available. Doing so will ensure they know what benefits are available and have a good idea about what they're interested in and the type of plan they want to enroll in that fits them best. 

According to experts, many employees also tend to take part in large scale data dumps during annual enrollment periods. Because of this, companies should be careful to not overwhelm their employees during those three weeks, as they may not remember all the programs that are out there and available to them. Instead, it is much more effective to communicate what’s available to them in terms of programs and benefits consistently and year-round so the information is engrained.

Jason Hargraves
Jason Hargraves
See Jason Hargraves's Profile
Jason Hargraves is the managing editor of insuranceQuotes.com—which publishes in-depth studies, data and analysis related to auto, home, health, life and business insurance—where he studies the insurance industry in order to direct and oversee the management of editorial content that provides trusted tips, advice and insights for consumers. A veteran reporter, editor and content creator, Jason has covered business, personal finance and consumer trends at major daily newspapers and consumer-driven publications, including The Houston Chronicle, The Washington Times and Angie’s List. A native Texan, Jason lives in Austin, where insuranceQuotes.com is based.
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