In the competition for talent, getting benefits right is a top priority for employers. Across multiple employee surveys, year after year, workers rate health care as the most important benefit after compensation. For many HR departments, the last quarter on the calendar coincides with the season for employee benefits open enrollment.  

 

If you’d like to speak to an HR representative about your business, contact us. 

 

If you’re an employer new to open enrollment, you probably have some questions about the best way to conduct your first enrollment. In this article, we will: 

• answer common employer questions about benefits enrollment 

• explain the process for conducting an enrollment 

• discuss best practices for employee communications and education 

• review ACA plan deadlines, compliance requirements and 2023 IRS plan limits 

• provide an open enrollment checklist for quick reference 

 

Definitions of Open Enrollment and Timing 

What is benefits open enrollment? In order to participate in employer-sponsored benefits such as health care, dental, vision, FSAs and/or HSAs, life insurance, and short- and long-term disability insurance, employees need to opt-in through enrollment. Open enrollment for healthcare is a season during which employees may sign up for and purchase your employer-sponsored health plan(s) in the absence of a qualifying life event, such as divorce or death. It’s also a time to make changes to benefit elections from prior years—for example, switching between the low-deductible and high-deductible plan options.  

 

When should employers have open enrollment? Many companies align their enrollment to the calendar year. For a plan year starting January 1, 2023, you would want to conduct an open enrollment in the final quarter of 2022. Employers also need to allow time to transmit the results of open enrollment to your insurance carriers or benefits broker. In consideration of these factors, most employers plan enrollment to be open in November for a January 1st start date.  

 

How long should employers allow for employees to enroll? There are no compliance rules for how long open enrollment must last. But the best practice is to make sure employees have plenty of time to consider their options and confer with family members. Most employers leave enrollment active for two to four weeks. It is also best practice to communicate with employees well in advance of the enrollment period.  

 

What is the Process to Conduct an Open Enrollment?  

Listen: Employers must prepare for open enrollment long before the enrollment is opened. First, it is helpful to survey employees about what is working and not working with the current slate of benefits. Use the survey information to fine-tune health plans and evaluate possible new voluntary benefits. How are the current health plans performing in terms of both the cost and the levels of service received? Are there additional benefits employees wish their employers would offer? Early summer is a good time to conduct this survey and study the results. 

 

Analyze: Now you know what employees want. It’s time to gather the rest of the information you will need to determine the benefits options for the upcoming year. Analyze last year’s benefits costs and what your budget will allow for next year’s benefits. Some companies go through the rest of the benefits management process themselves while others work with a benefits broker who specializes in helping businesses of all sizes find the right mix of benefits and affordability. 

 

Research and negotiate: Next, benefits managers start their research. They compile information, compare plans, and negotiate rates. By the end of summer, you will need to have made decisions about which plans will be offered to employees. 

 

Prepare for enrollment: Once options are locked in place, the benefits manager needs to get ready for the enrollment. This involves a lot of communication with employees (more on that below) as well as getting the enrollment forms ready for distribution and then collection at the end of enrollment. In the past, benefits open enrollment was a highly manual, paper-intensive process dreaded by HR professionals. Luckily, today’s self-service online enrollment wizards create easy, highly efficient benefits open enrollments.  

 

Conduct enrollment: Online enrollment functionality should be part of your cloud-based benefits administration and HCM software. Online open enrollment puts all of the information and enrollment forms needed for enrollment into one place and then walks employees through their election, showing them a summary of benefits chosen and associated costs. Employers will be able to see who has completed enrollment and who may need a reminder. Efficiency and visibility are two of many employer advantages delivered by benefits enrollment automation. 

 

To learn more about how to conduct open enrollment, explore these additional resources: 

• Asure: 6 Tips for a Flawless Open Enrollment 

• SHRM: Open Enrollment Guide  

• U.S. Centers for Medicare & Medicaid Services: Healthcare Glossary 

• UnitedHealthcare: Open Enrollment Plan Benefits Video Series 

 

Step Up Employee Communications and Education 

Although employees care deeply about health insurance, they don’t always know how to get the information they need to make informed decisions during open enrollment. Two recent surveys drove home the need for additional employee education and communication. First, a recent Forbes Advisor survey found “about half of insured Americans found cannot correctly define the concept of a copayment or deductible.” Similarly, a Harris Poll survey revealed that “72% of employees wish someone would tell them the best health insurance plan and 62% don’t change health insurance selections year over year because they it is too stressful.” 

 

These stats highlight the need for better workplace communication. Start communicating with employees about the upcoming enrollment and their benefit options early. Don’t just communicate about new benefit offerings or plan limit changes; give employees a full education about all their options.  

IRS Plan Limits for 2023 

Each year, the IRS defines the limits for what constitutes a “high deductible” for high-deductible health plans (HDHPs), as well as how much employees and their employers can contribute to health savings accounts (HSA) and flexible savings accounts (FSA). Access the latest information on 2023 deductibles, out-of-pocket maximums, and HSA/FSA contributions here. 

 

ACA Compliance Requirements 

If your company is an applicable large employer (ALE) under the ACA, you will need to make sure your health plan provides minimum essential coverage and that it meets the ACA’s affordability and minimum value thresholds. Learn more about ACA compliance by watching Asure’s video ACA Compliance: What Every Business Needs to Know. 

 

Is your business planning to purchase benefits through the Affordable Care Act (ACA) exchanges? If so, here are the key dates for open enrollment for 2023 plans: 

• November 1, 2022. Open Enrollment begins. 

• January 15, 2023: Open Enrollment ends. 

• January 1, 2023: Earliest plan start date. 

Note that many states have their own ACA exchange deadlines, including California, Colorado, Connecticut, Idaho, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Rhode Island, and Washington DC. Be sure to check your own state’s exchange for specifics on those deadlines.  

Checklist for a Smooth Open Enrollment 

In summary, here are 10 steps you will need to complete in order to ensure a smooth open enrollment for healthcare and other benefits: 

 

1. Conduct employee survey and analyze results 

2. Review of last year’s costs 

3. Gather new requirements 

4. Conduct research into carriers and plans 

5. Negotiate with broker or carriers about cost 

6. Create digital benefits explanation packet for employees 

7. Conduct benefits education sessions with employees 

8. Open the benefits enrollment period 

9. Send timely reminders to employees who failed to complete enrollment 

10. Communicate results of the enrollment to your benefits broker and carriers 

 

Need some help planning, automating, or conducting your next open enrollment for health care? Asure offers expert HR resources and consultants, a secure, cloud-based benefits administration platform, and prepaid benefits cards that can help.