During this time of the year, many employers are renewing their benefits plans and undergoing open enrollment, which allows employees to make changes to their benefit elections. There are several moving pieces handled at the HR level, including plan decisions (i.e. the potential to change plans), benefit implementation, and employee communication. Therefore, it is important that employers understand their compliance requirements as well as have a process in place to ensure these requirements are met.
BenefitsPro details seven compliance tips that employers need to keep in mind during their open enrollment periods. The article points out two key areas that employers should pay close attention to:
- Distribution of annual legal notices, and
- Eligible groups.
Regardless of plan design or carrier changes, employers are required to distribute annual legal notices. These notices include the HIPAA Notice of Special Enrollment Rights and Children’s Health Insurance Program (“CHIP”) Notice. While it is not required that notices are distributed at open enrollment, many employers distribute these as part of their open enrollment process.
The second compliance requirement highlights the eligibility of groups of employees that are not actively employed. This can include COBRA participants and alternate recipients under a Qualified Medical Child Support Order. Since the open enrollment period also applies to these groups, employers need to make sure all communication around plan changes and options are made available to these participants ahead of time.
Apart from open enrollment, there is also active enrollment where all employees are required to make new elections each year. This ensures that each employee is given the opportunity to elect or waive benefits and the employer has a record of this for each open enrollment period. An active enrollment can reduce the likelihood of employees questioning whether they were offered coverage. Employers offering employees the opportunity to pay for benefits through pre-tax salary reductions should ensure that their annual enrollment method aligns with the terms of their Section 125 cafeteria plan document. Overall, employers should make sure that they have a process in place for their annual open enrollment period. A process will help to ensure that compliance requirements are met and relieve some of the burden of an already hectic time. If you have questions about open enrollment and if you are compliant, do not hesitate to contact us.