Benefits - How Open are You about Enrollment?
Are you ready for Open Enrollment Season? Every year, companies talk with their employees about their insurance coverage for the new health plan year. For most employers, that takes place in the fall as a traditional method of enrolling in insurance plans, and some organizations use another time frame for their plan year. Either way, employees must decide what type of coverage they want or can afford. This period is called open enrollment because that is when you can elect certain changes to be made for benefits offered to everyone at their respective companies. And, employers are constantly evaluating their benefits packages for employees.
According to the National Association of Insurance Commissioners (NAIC), during an open enrollment period, insurance carriers are required to accept all applicants of the group without underwriting or evidence of insurability. Open enrollment is generally only held once a year. If you as a worker miss your company’s annual open enrollment, you likely will not be able to enroll in your employer-sponsored health insurance program until next year. Certain exceptions apply for new employees or employees with life changing events.
Before making a choice, especially for employees, these steps are very important:
Check to see if your current physicians and area hospitals are in the plan’s network. Using network providers generally will save money on your health care.
Check to see if spouses or dependents are covered. Some plans will cover spouses and other dependents, while other plans will not. Clarify coverage for step children.
Read all of the plan materials thoroughly. Doing so will tell you what your rights and responsibilities are under each plan.
If you take prescription medications, check them against the list of approved drugs in each plan booklet. Also, if you take an expensive brand-name medication, check the copayment that each plan requires.
If you or any family member needs ongoing physical therapy or has a mental health problem that requires therapy, review what your health plan will and will not cover.
Check to make sure that you and your family have adequate coverage for emergencies if you are traveling either in the U.S. or in a foreign country.
If any part of a plan is unclear to you, ask for help from your human resources department or the insurance carrier.
If you are not satisfied with the answers to your questions, contact your state insurance department.
Employers are trying to save money. One way to do this is to reduce health insurance benefits and shift more of the premium costs to employees. Employees should make sure to carefully read their health plan materials, they may find that their benefits and costs will change for the coming year. Costs are definitely going up for 2023. Specialty pharmacy costs, high-cost claimants and overall medical inflation are among the top drivers for rising health insurance premiums. Plus, who is paying for what?
In this uncertain market, as an employee it’s important to carefully evaluate your healthcare costs when making your annual enrollment decisions. While one option might have high monthly premiums and a low deductible, and another might have a low premium but more out-of-pocket expenses, it could be misleading which plan is best for you until you do the figures.
To pick the best coverage, first calculate your healthcare costs from recent years and try to estimate what your costs might be for the coming year. Don’t forget to include the cost of doctor’s visits, daily medications and any procedures you might be planning. Next, make a list of the premiums, out-of-pocket expenses and benefits under each plan. Co-payments, deductibles and additional charges for wellness care or specialists (e.g. chiropractic care, cosmetic surgery, etc.) are examples of out-of-pocket expenses that you are responsible to pay.
Remember, if you use a medical provider that is out-of-network, you will generally pay more out-of-pocket expenses. Include these fees in your calculations. Once enrolled in a health plan, you will not be able to make changes until the next open enrollment period, unless there is a life changing event such as a divorce, job change, marriage, birth of a baby or adoption of a child.
The concept of open enrollment can be confusing, but the opportunity provides employers options to provide employees various ways to choose their health care and insurance costs. Although the choices may be limited in some cases, this time frame serves as the current best method of allowing changes to be made in employee health care.
Keeping certain restrictions in place, like not allowing employees to change their plan design whenever they want, helps the insurance companies and employers to maintain a certain relative consistency to control costs and limit adverse selection, but it limits the scope of available options to employees if they have a change in their status due to income shift or ability to work. Overall, open enrollment currently is the accepted practice for employers to develop a workable solution to offer insurance coverage and not cause mass confusion among the ranks. As an employer or employee, make sure to ask all the right questions, then pick the option that works best for you.
But what about business owners? In the insurance game, employers are constantly looking for ways to cut costs but still offer health care options that create desire for participation by their employees. It’s a tightrope—trying to hire and keep quality personnel and yet not go broke in the process. One advantage, especially to small businesses, is that there are a plethora of options that can be provided, and many at no expense to the employer.
Voluntary benefits allow organizations the best way to provide quality coverage and services without bankrupting the business. Essentially, employees pay for whatever they want at little to no cost to companies, and the expense is passed through to the consumer typically as a payroll deduction. You may have an administrative cost, but at least you’re not paying for the products.
Of course, HR directors or business owners must do proper due diligence, and vendors who are chosen should be vetted to find the best applicable suite of benefits at the best price. Don’t sacrifice quality of care for cost; but likewise, don’t offer products that may end up with very low participation because your employees cannot afford them. Your agent or broker should help you with this process.
If you don’t work with one, find out through networking with peers in your industry what they are doing to help lower health care costs. You may be surprised to hear what other companies are offering to employees. If it’s a good deal, they’ll be happy to tell you about it. Everyone likes to brag on themselves if they feel that they have made a smart choice, and if their employees are happy and staying healthy.
Here are a few tips on prioritizing voluntary benefits as an employer:
1.) Evaluate current needs with your work force. Don’t onboard a new vendor if your employees are not interested in the service, no matter how good it is or how cheap it is. Offering a product no one wants is a fast start to failure and a lack of confidence in you among your workers. Be empathetic with what turns them on.
2.) Listen, and ask questions. These fact finding missions are applicable to both your workforce and the vendors. Find out what the buzz is around the water cooler about what employees want. And, when you are interviewing prospective offerings, ask hard questions about quality of service, get references, and dig into what the product can do for your company.
3.) Make the agent dance. If you are working with a broker, make him earn his consulting fee by providing multiple options for various voluntary benefits, and have him develop a pro forma on how those vendors can increase your ROI as a business owner. And again, ask for references. Although you can’t pull out your six shooter and fire bullets at his feet like the Old West, you should ask tough questions for honest answers.
4.) Hold a benefits fair. Once you have selected your vendors, bring them in for a pre-open enrollment expo. The best way your employees can find out about what they have to choose from is to engage in face to face conversation with a benefits rep who can provide more personal insight to the products and services you are promoting to your workers. Offer a smorgasbord of companies at a central location on your campus. That way, your employees can have fun with their selection process and decide what they like and don’t like based on what they hear and see at the fair. Make it fun, and offer door prizes and special offers. Plus, your workers get a little break in their routine to find out what’s new and cool.
5.) Stick with things that work. No one likes failure, and no one appreciates benefits that don’t provide value and savings as well improving the quality of life. But if your voluntary benefits are successful, don’t make changes just for change. That drives your staff crazy, and your employees are too valuable to get upset by taking away services they like. After all, since they are footing the bill, why discontinue it–unless the cost outweighs the benefits. If your participation goes down because of expense, then it may be time to look for a replacement. However, the old adage, “If it ain’t broke, don’t fix it” still holds true.
6.) Be a cheerleader. Does that mean you need to go get a set of pompoms and make a human pyramid with your executive team? No, but at least you need to promote the real value that Voluntary benefits bring to your company and to your employees. After all, everything rises and falls on leadership. If your employees don’t catch your excitement and enthusiasm about their benefit offerings, then they won’t be interested. And you’re back in the same tired trap where you started.
Voluntary benefits are valuable for a variety of reasons. Your need as a business leader or benefits manager to provide the best in class for your human capital requires you to do your due diligence and make the tough choices when it comes to helping your employees glad they work for you. Although it never is easy to get straight answers all the time, at least doing your homework to get honest feedback is better than getting your answers from a Magic 8 Ball. Then go wild with voluntary benefits.
Attracting and retaining employees is a tough gig in today's post-Covid world. The competition is fierce, and it's difficult to find quality employees. For those who have decided to re-enter the work force, they are all interested in your benefits offering. If you are an employer, contact me about benefit options for your employees, including dental, vision, telemedicine, life and more. You can find product options on this website. Contact me for a consultation about affordable products for your employees.