Post-open enrollment checkup: 9 tips to avoid headaches later
Benefit professionals spend all year preparing for open enrollment, but the end of open enrollment doesn’t mean our work is complete. In addition to all the work we still have to do (setting up file feeds, ensuring carriers and vendors have the correct elections, etc.), there are a number of steps we can take now with our plans to make sure our “houses” are in order and avoid potential headaches later.
We’ve rounded up some important items that plan administrators should check on, to ensure everything is shipshape before the plan year begins.
1) Unconfirmed elections. Electronic enrollment is becoming more widespread each year. One advantage of benefits administration systems is that they can provide a record of when employees log in to the site and make their elections. But what about employees who log in, make elections, and never submit them? Perhaps this was intentional — for instance, an employee may have begun completing the form, then stopped after realizing that their spouse’s benefits were a better choice. Other times, this could be the result of an employee mistakenly thinking their submission was confirmed.
Conducting a quick review of these individuals before the plan year begins will be less painful than dealing with employees who discover after the first pay period of the next year (or worse, even later!) that they aren’t enrolled.
2) HDHP enrollment with FSA. High-deductible health plans have grown tremendously in recent years and will continue to grow. One characteristic that makes them so attractive is the fact that enrollees have the ability to make HSA contributions. With this ability comes restrictions on other coverages the individual might elect. FSAs are only allowed with an HSA when the FSA is “limited-purpose” or “post-deductible.” With a limited-purpose FSA, the funds can only be used on limited types of expenses not covered by the health plan, primarily dental and vision. With a post-deductible FSA, the funds can be used on medical expenses, but not until the medical plan deductible has been satisfied. These rules are complex, and taking steps now to educate employees may help prevent employees from becoming disgruntled at learning these rules after the plan year has begun, once they’ve been locked into their elections.
3) Stakeholder audits. Every organization has high-ranking stakeholders whose benefit elections are important to get right. Depending on your organization, this may mean just the C-suite, or executives above a certain level, and other times it may mean an expanded universe of highly-compensated employees. Carefully reviewing each stakeholder’s elections for internal consistency — and year-to-year consistency — helps avoid potential issues and demonstrates the benefits team recognizing the important roles certain stakeholders play within the organization.
4) Child support enrollments. At one time or another, all employers receive qualified medical child support orders (QMCSOs) or other similar orders that require the employer to enroll an employee’s dependent child(ren) in coverage. Unless otherwise specified in the order, these carry over from year to year. Intentionally or not, sometimes the employee doesn’t re-enroll the dependent in coverage during open enrollment. Therefore, employers can save themselves more work later in the year by ensuring that any dependents enrolled as the result of an order in one plan year are re-enrolled for the next plan year too, unless otherwise specified in the order.
5) Elections by employees with previous benefits issues. Each year there are employees who, for one reason or another, have issues related to their benefits. Maybe it’s a medical claim they felt should have been covered, or the DCAP election they didn’t fully understand, or maybe the payroll deductions didn’t match up with the elections. No matter the issue, impacted employees are not happy. That’s why it makes sense to keep track of which employees have issues during the year and, during open enrollment, review the elections for these employees to make sure they are accurate for the next plan year.
6) Elections by new hires during open enrollment. Extra attention should be paid to employees who are hired just before or during open enrollment. These employees may be enrolling in benefits for the current plan year while simultaneously, or soon after, enrolling in benefits for the next plan year. All of this may lead to confusion on the part of employees trying to understand which elections are for which period of time.
7) Missing life insurance beneficiaries. Life insurance through employers is an accessible way for employees to provide for their loved ones in the event of their death. Merely electing coverage doesn’t ensure those intended beneficiaries will receive the funds unless the individual names those beneficiaries. Frequently, benefits are elected on one page, and beneficiaries identified on another, which can lead to employees unintentionally failing to name beneficiaries. Auditing employees whose forms are missing beneficiaries and reminding them to complete that section can help prevent a maze of work later on, should the employee unexpectedly pass away.
8) Family enrollment for one line of coverage but not others. Employees can frequently choose between multiple tiers of coverage for themselves and their families. Mistakes do happen, though, and if an employee enrolls in family coverage for medical coverage, but employee-only for dental coverage, this could be a red flag. It’s also possible that their spouse’s plan has more attractive rates or more favorable plan design for certain lines of coverage, so maybe this omission was intentional. Either way, confirming this was truly the employee’s intent is the way to go.
9) DCAP enrollment without a dependent enrolled. Dependent care assistance programs (DCAP) are another great tool for those with eligible expenses. Unfortunately, these programs are frequently misunderstood — employees may not understand the restrictions on the use of the funds. For instance, some may believe the funds can be used on the medical expenses of a dependent. When an employee enrolls in the DCAP but doesn’t elect dependent coverage elsewhere, it could be an indication that they don’t understand the purpose of and limitations behind the DCAP.
In conclusion, don’t be afraid to reach out to impacted employees just to confirm that they took the appropriate actions. They will appreciate the effort to prevent problems from arising during the plan year (and you’ll save yourself a headache).