labor lawAdivision of labor law center

Fall is the season of crisp breezes, crunchy leaves underfoot – and for most employers, open enrollment for the next benefit year. As every HR manager knows, open enrollment is the one period each year when current employees can opt to add health insurance coverage.

Tips to prepare for 2009 open enrollment:

• Provide clear, attractive, portable written information on each insurance plan and benefit option offered. The information needs to be succinct, it but should include a recap of the costs and the benefits. Many employees will want to take the material home, to read it and discuss it with their spouses. Usually the insurance company can provide this information.
•  If your company provides several insurance options such as an HMO and PPO, a chart or table format comparing the costs and benefits of each plan, allows employees to “compare apples to apples.”
•  Reduce sticker shock by letting employees know that you are concerned about costs and have negotiated the lowest possible rates, for good coverage. Also, let the employees know if the company is paying for a significant portion of the premiums.
•  Go high-tech by also providing benefit information on a website, CD or DVD. Many companies now use online registration for employees to sign up, as well.
•  Have benefit plan managers in person and by phone throughout the open enrollment period to answer questions. Some people are more comfortable with verbal communication than with the printed word. It’s important that staff members who are on hand to take questions are fully trained in the details of your particular health insurance, and know about any changes this year.
•  Be patient. Many employees will ask the same questions – some will ask them more than once, as they struggle to understand complex policies.
•  Allow plenty of time to prepare for open enrollment. Make sure you have extra handouts and forms available, plus office supplies.
•  Have every employee complete a form either accepting or declining group health insurance coverage, to prevent misunderstandings. Supervisors should double-check each form to be sure it is filled out completely.
•  Have employees update beneficiary and contact information, as well as emergency contact records.
•  Remind every employee that if they decline coverage now, they will have to wait a year to sign up. This sounds obvious, but many employees are unclear on the meaning of “open enrollment.”
•  If your company does not offer paid disability or maternity benefits, consider adding short term disability coverage at an additional charge as an option. This coverage is relatively inexpensive. Remind employees that once they are pregnant or unable to work, it’s too late to sign up.
•  Print the open enrollment deadlines on every handout, and display them prominently on bulletin boards or posters. Urge supervisors to hand in all employees forms one or two days in advance, to allow for unforeseeable delays.

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1. Posted by: Kathleen

   Are there required lengths for the open enrollment period In California? Can some employees be allowed longer access to open enrollment than others?

2. Posted by: Amelia

   Hi Kathleen! According the the California Department of Insurance, the length of open enrollment is generally set by the insurance company with input from the employer, not by law. The department says that the average open enrollment period is two weeks to one month, although we have seen open enrollment periods as short as 10 days. Some companies use other time frames, such as 27 days, 28 days or 30 days.

   Allowing some employees a longer open enrollment period than others would not be a best practice in HR, although it is not strictly illegal. One concern would be that a protected group would be disproportionately affected by this disparity.

   Suppose XYZ company offers a 30-day open enrollment period for salaried managers, and a 5-day open enrollment period for hourly workers. If most of the firms Hispanic employees are hourly, a smart lawyer could argue that this essentially is discrimination in benefits offered, based on race, color or national ancestry. You can post additional questions on our sister site at http://www.humanresourceblog.com. HTH, and thanks for reading the blogs!~ Amelia

3. Posted by: Dan Streich

   What are the typical policies regarding droping insurance outside of the open enrollment window? Are there any laws protecting the employee for paying for unneeded coverage. Specifically in Minnesota?