Benefits 101: What Is Open Enrollment and How Can You Prepare for It Now?

Open enrollment season begins each year in November. It’s one of the busiest times of the year for HR and benefits administrators. But what exactly is open enrollment, and why should your employees care about this critical benefits planning period?

What is open enrollment?

Open enrollment refers to the period in which employees can choose their health care coverage for the coming year. Choices typically fall into one of three categories: signing up for a new plan, making changes to a current plan, and/or dropping out of an old plan. This is also generally the time when you’ll sign up for or update contributions to other benefits, like a Flexible Savings Account or Health Savings Account (FSA or HSA).

If an employee doesn’t sign up for a specific kind of coverage or benefit during the open enrollment period, they’ll generally have to wait until the following year to enroll (although there are exceptions in some cases, such as the birth of a new child).

This is a great time to educate employees about their employer-sponsored options, provide informational sessions on how to choose a plan that best suits them, and inform employees of any changes to offerings. Their decisions should reflect their unique needs for the coming year but the process can be overwhelming at times, so many employees default to the previous year’s choices. 

When is open enrollment?

The open enrollment period differs slightly by state and insurance provider. Here are the most common open enrollment periods:

• Marketplace plans and individual plans: Nov. 1 to Jan 15 in most states (some states, like California, go through January 31st)
• Employer-sponsored health insurance: These are up to the discretion of the employer but will typically take place in the fall and last for 30-45 days, though there’s no set time limit.
• Medicare: Oct. 15 to Dec. 7

Special enrollment period

Employees may be eligible to enroll in health care coverage outside of the usual open enrollment period if they experience certain qualifying life events, including getting married or divorced, having a baby, adopting a child, or moving. 

Employer-based plans must give employees 30 days before or 30 days after a qualifying event to make enrollment changes. 

How to prepare for open enrollment

The earlier you start planning for open enrollment, the better informed and prepared your employees will be when it comes time to enroll in medical coverage. Here are a few steps you can take to lay the groundwork for open enrollment season:

1. Evaluate your current benefits

Assess your current benefits and determine whether you want to make any adjustments before open enrollment. Are your benefits meeting your employees’ needs, or are there gaps that exist? Is it getting harder to attract and retain employees, and are there changes you can make that will make you a more competitive employer? 

Employee surveys are a great way to get a pulse check on employee satisfaction with your benefits and see if there are areas for improvement. Take a look at utilization rates to see if there are any benefits that are not resonating with your employees. You can also consult benchmarking data to research what other companies of your industry and size are offering and ensure that your package is competitive. 

2. Set clear timelines

It’s important to provide give enough employees enough time to make their enrollment choices, but clear deadlines are equally essential. The federal open enrollment period is 45 days long, but many companies give employees two to four weeks for open enrollment. Communicate your deadlines early and often to ensure employees submit their elections on time. 

3. Consider active vs. passive enrollment

There are two ways you could approach open enrollment: active or passive enrollment. With active enrollment, employees are required to submit their benefit selections each year, even if they remain the same as the previous year. With passive enrollment, an employee’s selections will roll over from the previous year unless they make changes. 

There are pros and cons to both options. Active enrollment encourages employees to engage with their benefits and reinforces their value, but you risk employees forgetting to make elections. Passive enrollment eliminates that risk, but could reduce engagement and may pose problems if benefit offerings are different from the previous year or employee costs are increasing.

4. Get creative with communication

One of the biggest hurdles to a successful open enrollment period is your employees having a clear understanding of their options. For example, one survey by UnitedHealthcare showed that only 9% of Americans understood four basic health insurance terms: health plan premium, health plan deductible, out-of-pocket maximum and co-insurance. For employers, this signals a need for more education and communication. 

During open enrollment season, make sure there’s an open door policy so employees feel comfortable asking questions as they arise. Hold multiple information sessions and offer options for different times to accommodate everyone’s schedules. Optional follow-up Q&A sessions can provide a venue for employees to ask questions about their benefits in a group setting. Develop a strategy for how often you will communicate about benefits and which channels you’ll use. Using a variety of communication channels such as email, Slack, and postings on your company intranet can help you reach more of your employees. 

Prepare clear and concise collateral that explains the ins and outs of your benefit offerings, plan summaries, employee costs and employer contribution, where to go for enrollment, and what will happen after enrollment (like if employees can expect to receive ID cards, when they’ll be sent, and how employees can set up any necessary online accounts). 

Communication should extend beyond open enrollment, too. Dedicate a page on your company intranet to benefits so employees know where to go if they have questions. A FAQs page or glossary of important insurance terms can be a great evergreen resource for employee education and help your employees make informed decisions both during open enrollment and as they use their benefits throughout the year. 

A better employee experience

Ultimately, the employee experience should be top of mind when it comes to how you navigate open enrollment. While open enrollment only lasts a short time, there are steps you can take throughout the year to gear up for a successful season. We’d love to chat about your preparations for open enrollment and how you can provide easy-to-navigate benefits for your employees. 

Reach us at sales@getbenepass.com for more information.