Open Enrollment Season: Best Practices for Employers

Fourth Quarter. For some, those two words are associated with the final portion of a football game. For employers and their brokers/consultants, it represents a period of time at the end of the calendar year where reviewing health plans, premium increases, plan documents, and other regulatory requirements, and overall planning for the next year occupies a top spot on many a to-do list. We’re here to offer a few tips that will help you avoid some of the most common stumbling blocks that crop up this time of year.

To start with, employers, in tandem with their brokers/consultants, should plan out a checklist of tasks to complete before open enrollment actually begins. The six to eight weeks before open enrollment is a great time to:

• Review a list of all the vendors you interact with to see if any changes need to be considered; 
• Check any and all software to make sure there are no unforeseen glitches when the actual enrollment period begins and perform software updates as needed;
• Establish how and when communication with all employees will take place and make sure that communication is simple, clear, and suited to different levels of understanding; and
• Review data from the previous plan year(s), paying attention to any pain points that benefits may have created.

During this planning period, employers may want to also consider potential changes to contribution levels, eligibility requirements and waiting periods for new hires, leave programs, and decide what type of open enrollment process they’ll use (passive or active).

And then, of course, we come to compliance. As part of the preparation for a new plan year, employers cannot overlook the importance of ensuring they’re still meeting all of their benefits compliance requirements. This includes but is not limited to:

• Reviewing plan documents (SPDs, SBCs, Wrap documents);
• Reviewing contracts from service providers and vendors to make sure they’re fulfilling their obligations;
• Conducting nondiscrimination testing where needed; and
• Reviewing and updating model notices. 

A very pragmatic tip for employers is to create a calendar of reminders to distribute certain documents and complete filings/reporting as required. It’s important to review these calendars every year to make sure they remain up to date as regulations and requirements change.

It’s understandable that all of this frenzied fourth quarter activity might overwhelm some employers, especially those that also experience shifts from the small to large group market, those that decide to transition to a self-insured plan, etc. To help minimize frustration for both employers and employees during open enrollment, employers should take steps to:

• Communicate regularly and clearly with employees;
• Provide straightforward, detailed descriptions of available benefits and costs; and
• Stay on top of all enrollment deadlines.  

As part of open enrollment planning, employers that offer prescription drug coverage also need to confirm that they’ve provided Medicare Part D Creditable/Non-Creditable Coverage notices to employees. Plan sponsors are required to provide creditability notices in a couple of different scenarios, including prior to the beginning of Medicare Part D’s annual open enrollment period (i.e., before October 15^th) and prior to the effective date enrollment in the employer’s Rx plan. To satisfy most of the circumstances requiring a creditability notice, many employers choose to provide these notices to participants (1) when they first become eligible for the company Rx plan, and (2) annually during open enrollment. 

Employers with fully insured plans can generally rely on their insurance carriers to perform creditability determinations. We’ve designed a creditable coverage calculation service for self-insured employers that need to perform their own creditability determinations, more information about which can be found here.

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