With the calendar now in October with the leaves changing color and the weather turning brisk, this means that for many employers open enrollment is nearly upon us.
According to the ADP Research Institute, only 58 percent of employees understand the benefits offered to them. With this reality, they will certainly turn to their employers, HR leaders and benefit advisors for answers. Although every employee’s needs are different, many of the same questions arise every year.
Some questions are quite basic, but they are important in building foundational knowledge that employees can use later in their professional lives to navigate more complex benefit needs.
Below are five of the most common questions that employees pose every year, as well as helpful tips you can share with your clients to help answer them.
Question 1: What is Open Enrollment?
Employers who offer company-sponsored benefits hold an open enrollment period each year. During open enrollment, employers communicate upcoming benefits features and changes for employees who are eligible for benefits. In turn, employees choose the benefits that best fit their needs.
Question 2: How do you choose the right health benefits coverage for the company?
The company shops for health and benefits coverage just as it would for any other business purchase. Managers ask questions, compare pricing, and take stock of what your needs are with an affordable product that best represents those needs. Specifically, businesses consider the following:
- The types of coverage/plans your business and its employees prefer
- How much you and your employees expect to spend for coverage
- Preferred medical providers and hospitals you would use
- Plans’ preferred carriers (such as “household name” companies)
- The level of support the group needs from a broker or carrier
- Plans that meet Affordable Care Act standards, if applicable
Question 3: What types of health benefits are available?
Medical coverage is often the first to come to mind when thinking about health and benefits, but there are a several options businesses can consider providing to their employees.
Medical: Provided by an employer to employees and sometimes their spouses, partners, and legal dependents. Employer-paid premiums are generally tax-deductible. Each state sets minimum participation requirements needed to offer group health insurance to a company.
Partially Self-Funded Plans: An employer assumes some of the financial risk for providing health care benefits to employees.
Fully Insured Plans: An employer pays a fixed-premium rate based on the number of employees enrolled.
High Deductible Health Plans (HDHP): Higher deductibles can be combined with Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs) that allow employees to pay for qualified out-of-pocket medical expenses with pretax earnings.
Physician-Hospital Organization (PHO): An alliance of physicians and hospitals who sell their services to managed care companies or directly to employers.
Managed Care: Provides incentives for employees to use in-network and out-of-network physicians and hospitals. Common plans include Preferred Provider Organizations (PPOs) or Health Maintenance Organizations (HMOs)
Question 4: Can I enroll some other time?
In most cases, employees need to enroll during this period, but there are exceptions that can allow you to enroll at other points during the calendar year. These are triggered by qualifying events, which include involuntary loss of current coverage (e.g., if an employee ages out of his or her parents’ coverage), if an employee gets married or divorced, or if the worker becomes a dependent or gains a dependent. Other reasons include an error in enrollment, and if the employee permanently moves to an area with different plan options.
Question 5: What is an HSA and is it right for me?
Health savings accounts (HSAs) are medical savings accounts that allow individuals to contribute a particular amount each calendar year to pay for future medical expenses. According to HSA Center, an HSA can be used to pay out-of-pocket expenses incurred prior to meeting the High Deductible Health Plan deductible. It is tax deductible from gross income, invested tax-deferred, tax-free when used for qualified medical expenses and rolled over year after year.
Armed with these answers, you should be able to help your clients prepare to discuss why open enrollment is important and how they can help their employees find the right coverage. This is a moment to help clients engage employees around their benefits, and position benefits planning as an important part of the company’s overall strategic direction.
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