Preparing for Health Benefits Open Enrollment Period

During the webinar titled “Preparing for 2015 Open Enrollment,” Mike Sinkeldam, a principal for Mercer’s Health and Benefits practice in Irvine, California, pointed to some employee-focused objectives of open enrollment that are important. “Communicating changes about benefit programs to employees, reminding them of the benefits available, and giving them the chance to make changes to their benefits should all be carried out during this period.”

He said this is also a time to carry out more employer-based objectives, including administrative needs, such as making sure beneficiary designations and dependent information are correct, and employee relation goals, such as educating them about the Patient Protection and Affordable Care Act (ACA) and how it affects them. Employers should also use this time to manage legal compliance requirements via communications, which can include various notifications and reporting that are required by state or federal law.

Sinkeldam also noted that while laws that deal with health care coverage, such as Internal Revenue Code Section 125 and the Employee Retirement Income Security Act (ERISA), do not specifically require employers to hold an open enrollment period, it is encouraged and can be helpful in meeting the previously mentioned employee and employer objectives.

New York-based Babette Madison, a principal in Mercer’s Health and Benefits practice, offered several tips for the open enrollment period:

• Supply legally required communications. This includes providing new hires with a public exchange notice, which explains health care exchange systems and services, as well as tax credits and subsidies;
• Update materials to reflect 2015 information;
• Use a Summary of Material Modifications (SMM) document to communicate changes;
• Consider delivery methods to ensure required notices get into the hands of employees;
• Consider the use of technology to facilitate the process. If electronic delivery can be used, it may save an employer time and money; and
• Consider how to capture information from employees (mailing addresses, beneficiary designations and so on) that may be needed for an employer’s records.

Sinkeldam added that the open enrollment period can be used to fulfill ERISA disclosure requirements through vehicles such as a summary plan description (SPD), SMM or summary of material reduction (SMR). This period can also be used to address other issues that may impact employees such as the ACA’s individual mandate requirement, any change for the waiting period, changes to eligibility terms based on the pay-or-play strategy, and updating COBRA notices to explain how COBRA may affect enrollment in the exchange marketplace.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events.

Sinkeldam reminded webinar attendees that employers need produce and distribute a summary of benefits and coverage (SBC), which needs to be in addition to, and not in place of, the SPD. The SBC document needs to be easy for employees to understand, so they can use it for comparison shopping of coverage if need be.

Madison added that the SBC can be delivered electronically to current participants and beneficiaries if requirements from the Department of Labor (DOL) are met. However, paper copies of this and other documents must always be available to employees and beneficiaries upon request. She stressed that for plans governed by ERISA, individual receipt of required documents is a key requirement. The options include hand delivery, postal delivery and electronic delivery. With electronic delivery, Madison cautioned, “Mere posting on a company intranet is not good enough. An employer must be able to verify delivery of materials to the individual employees.” She also recommended that employers include a notice to employees that explains the significance of the accompanying documents.

Sinkeldam reminded employers that depending on where they are located, there may be additional requirements and paperwork relating to health care coverage. Certain state and local jurisdictions, San Francisco and Vermont being two examples, have a mandate that employers contribute to health care coverage or pay a surcharge. In these instances, employers are also required to submit reports to verify employee coverage.

Similarly, he said, employers should use open enrollment as an opportunity to ensure that all plan documents and forms reflect changes to the law regarding same-gender spouses or partners in the wake of the U.S. Supreme Court’s Windsor decision amending the Defense of Marriage Act (DOMA) (see “Employers Need to Make DOMA-Related Updates”).

Shawn Coons, a principal with Mercer’s Talent practice, in Dallas, Texas, emphasized that good communication about enrollment-related topics is important. She pointed to Mercer’s own use of a subscription microsite (http://www.imercer.com/comtools) to convey information about health care reform to employees.

Designing the content so that it can viewed on multiple platforms, especially tablets and smartphones, is definitely important. “With so many employees having smartphones, employers should look at taking advantage of this platform in ways such as replacing paper cards with mobile wallet cards,” Coons said. “These mobile cards would contain a summary of benefits, as well as relevant web links and phone numbers.”

Coons added that making use of videos can also be helpful (see “Videos Prove to Be Engaging Benefits Communications”), and employers should also consider having content available in Spanish or other languages, depending on their employee demographics.