During a Mercer webcast, Jackie Cuthbert, member of Mercer’s Workforce Communications and Change practice in Atlanta, Georgia, noted that this year’s open enrollment will be different because of health care reform. Individuals will be responsible for obtaining health care coverage, health exchanges are opening, and employers are expecting media coverage that may confuse employees. Employees are looking for ways to infuse open enrollment with communication about health care reform.
Mike Sinkeldam, attorney and member of Mercer’s Regulatory Group in Irvine, California, noted the objectives for open enrollment include:
- Reminding employees of available benefits;
- Communicating changes in benefit programs, employer focus (i.e. wellness);
- Allowing employees to make changes to their benefits;
- Meeting administrative needs (for example, designating beneficiaries, updating dependent information, reducing staff time in dispersing information and education);
- Pursuing employee relations goals (for example, reinforce value of benefits); and
- Managing legal compliance risk through communication, required federal and state notifications and reporting.
Employers have to provide summary plan descriptions (SPDs), summaries of material modifications (SMMs) and summaries of material reduction (SMRs), and each has certain timing requirements. Sinkeldam said open enrollment materials are often formally designated to serve as SMMs or SMRs.
This year, employers are required to provide Department of Labor public exchange notices—for all employees by October 1, and for newly hired employees within 14 days of hire. The notices must include notice of the existence of the exchange marketplace, contact information, description of services, potential eligibility for premium tax credit or subsidy, and notice that obtaining coverage through the marketplace may cause loss of employer coverage. The notices must be in writing and understandable to the average employee.
In addition, employers should communicate the individual mandate requirement that is effective January 1, 2014, any changes in waiting periods due to the Patient Protection and Affordable Care Act’s (PPACA’s) 90-day requirement, and changes to the tax treatment of benefits as a result of the Supreme Court’s ruling on the Defense of Marriage Act (DOMA) (see “Benefit Changes Ahead After DOMA Ruling”). Sinkeldam said employers must decide if they will administer tax treatment based on an employee’s state of residence or where the marriage was performed, or if they will wait on further guidance from the Internal Revenue Service (IRS).
Sinkeldam reminded attendees that calendar year plans must include in open enrollment communication the required summary of benefits and coverage (SBC) (see “SECOND OPINIONS: Summary of Benefits and Coverage Updated Guidance”). These must include information about whether the plan option complies with minimum essential coverage requirements, and that choosing that plan will eliminate any potential for a subsidy but will satisfy the individual mandate.
According to Sinkeldam, plan sponsors can use open enrollment to satisfy other disclosure requirements, such as Health Information Portability and Accountability Act (HIPAA) notice of privacy practices and special enrollment rights notice, the initial Consolidated Omnibus Budget Reconciliation Act (COBRA) notice, and the Uniformed Services Employment and Reemployment Rights Act (USERRA) military leave notice.
Babette Madison, attorney and member of Mercer’s Regulatory Group in New York, New York, said it is important for employers to develop a communication strategy. The Employee Retirement Income Security Act (ERISA) requires documents be delivered in a way that is “reasonably calculated to ensure actual receipt of material.” Documents can be hand delivered, mailed (but first-class mail is the only option with presumption of receipt) or delivered electronically. But, employers cannot just post information on their intranet, she warned. They must ensure actual receipt and give employees notice of their right to receive print versions.
For employees who do not regularly access employer computers and e-mail systems, before sending documents electronically, employers must have participants’ consent. Madison said the consent must inform employee about the types of documents covered by the consent, the right to withdraw consent, the hardware and software needed to access information and steps to updating their address. Employers need to verify accessibility by participants.
Madison recommended that before open enrollment, employers decide what legally required communications must be provided and what plan materials need to be clarified to ensure understanding by participants. Access employees’ ability to use electronic methods, and establish a budget and a work plan to meet objectives.
While open enrollment can be used to comply with disclosure requirements, that is not the only communications employers should provide.
Cuthbert said some employers are planning to provide exchange notices with a wraparound document comparing the exchange choices to employer offerings. Employers can use the wraparound document to communicate the value of their offering. Whenever they can, she recommended, plan sponsors should weave messages into their open enrollment communications that reinforce the value of their benefit offerings.
Plan sponsors should ask how they are supporting employees in making good choices. “It’s not the time to tell employees everything about everything, keep it simple and help support decision making,” Cuthbert said. Plan sponsors can use communications to teach employees how to be good consumers, not just during open enrollment, but throughout the year.
In addition, plan sponsors should ask what they can use to supplement print communications. Cuthbert said videos are a good example.
But, definitely communicate about health reform, she stressed. She noted that Mercer offers Health Care Made Simple, a subscription microsite for employee use that hopefully answers the majority of employee questions to keep calls away from HR or call centers. Mercer also offers a do-it-yourself health care reform communications tool kit, which includes sample language and suggestions for how to communicate. Cuthbert noted that Mercer tried to anticipate certain combinations and approaches, and created templates for employers to use.