Why It's Not Too Early to Start Improving Open Enrollment
It might sound a little crazy, but open enrollment is right around the corner -- and now is the perfect time to start preparing. The fact of the matter is, most employers review their benefits only once a year. A 2016 Society for Human Resource Management report found that 77 percent of 2,937 HR professionals surveyed said they performed a benefits program review on an annual basis only.
So, it's optimal to get ready now. For one thing, it’s better to get ready sooner so there’s more time to explore more options and really perfect plans. But why else should companies have open enrollment on the brain?
Here are four open enrollment preparations that are important, to get a jumpstart on now to ensure your employees are informed enough to make the best use of their benefits:
1. Thanks to the ACA, It’s time for a new enrollment strategy.
One of the main stressors of crafting a new open enrollment strategy this year is the Affordable Care Act: 2016 will be the first time organizations have reporting requirements under the new act. Employers now must file annual information returns with the IRS and furnish statements to employees on healthcare-plan coverage information.
To ensure a simple reporting process, strategize and implement a system of best practices so the company complies with all necessary reports. The process should involve identifying all employees who fall under the ACA definition of "full-time," which may include some special classifications, like contractors or short-term temps. Assess the best way to repeat employee classifications moving forward, to ensure the company is complying with the employer shared-responsibility provisions.
After determining employee status, update summary plan descriptions (SPDs) to keep employees informed of their rights and obligations. SPDs are automatically given to participants because plan administrators are legally obligated to provide them. Work closely with your HR software partner and benefits brokers to ease some of the burden of successfully reporting to the IRS. You’ll avoid harsh penalties that way, too.
2. Consider offering new benefits early on.
Once you've properly dealt with the ACA, your new enrollment plan will also need to address any potential changes to benefits plans in order to really gear to what employees want most. Would employees be interested in popular new options? Health savings accounts (HSAs) and consumer directed health plans (CDHPs) are both on the rise. The 2016 report from SHRM found that the percentage of organizations offering HSAs increased from 43 percent to 50 percent over the past year.
Mercer’s 2014 National Survey of Employer-Sponsored Health Plans, which polled 2,569 employers, resulted in several key findings as well. Offerings of CDHPs jumped from 39 percent to 48 percent among employers with 500 or more employees.
The SHRM report also found that many of the employers surveyed were trying to encourage participation in retirement plans. One out of five organizations were automatically enrolling current employees who were not participating in their retirement savings plan; and that gave them the option of actively opting out.
Auto-enrollment, however, is an effective method for engaging employees in their benefits. It encourages them to look at the contribution plan and consider what best fits their needs.
Were similar plans offered last year? If so, how interested were employees? What were they prone to choose? Use this information to predict the success of other benefits, like wellness plans. The SHRM study found that wellness continues to gain in popularity -- the proportion of employers offering wellness resources and information increased from 54 percent to 72 percent over the last 20 years. Despite this rising trend, it’s still difficult to gauge what employees want, which is why it’s important to talk to them.
The best way to plan ahead is to look back and identify what employees selected; how the company planned for those selections and executed the open enrollment process; what, if any, improvements there are that might be made for the upcoming period.
3. Get a head start on reviewing last year’s process.
After spending ample time reviewing what went well during last year’s open enrollment -- and ascertaining what could be improved --work together with your benefits provider to take this year’s open enrollment to the next level.
Set up a post-open enrollment meeting with a broker or senior benefits consultant to review what went well this past open enrollment (e.g., the company’s easy-to-use open enrollment technology) and what could have gone better (e.g., not as many employees enrolled in the new high deductible plan as the company wanted).
Run through what new plans and benefits were offered, and look for information that will inform future open-enrollment processes. For example, measure the level of employee engagement with the newer benefits and compare those figures to the previous year’s offerings. How well were employees educated about them? It may also be crucial to perform a cost-analysis for this year and the previous year, ahead of the first bill.
Most importantly, seek feedback from the people who matter most: your employees. Poll them about how the open enrollment process went for them. Did they understand all of the options presented to them? Did they have enough time to enroll?
Half of the employee benefits battle is communicating offerings in a way that’s understandable and easy to digest. See how well the company did, and consider making plans this year to revamp the open enrollment guide for employees or offer more online resources.
Talk to an insurance broker to get additional insight on benefits packages. Brokers can provide guidance and help find alternative plans to best fit your employees and the company.
4. Connect With employees early.
How do companies determine what works best for their staff? They talk to them. Conduct a survey to see where employees get lost or confused when it comes to employee benefits. Ask them about their open enrollment experience last year. Did they understand their options? What made actually enrolling in benefits tricky?
Most likely, there was at least some confusion. Only 20 percent of 5,209 employees surveyed in Aflac’s 2015 WorkForces Report said they had enough information to make informed decisions about their benefits. That disconnect is not uncommon when it comes to benefits information across industries.
In fact, a recent survey of 341 respondents conducted by the International Foundation of Employee Benefit Plans (IFEBP) found that most employees responding were confused by their benefits, and an alarming 80 percent of employers didn't think their employees even opened or read information provided.
How can companies combat this epidemic that can lead to poor benefits choices? Employees will suffer the consequences if they don’t know what benefits they’re selecting. For instance, they may select an HDHP and be shocked by their subsequent high deductibles -- when they just needed more information.
Begin strategizing immediately so all your employees get the most out of open enrollment and make the decision that best suits their needs. Using information from the assessment of last year’s plan, identify and prioritize what changes need to be made. For example, establish a time frame and create an employee communication plan that works in the points that weren’t as clear last year. The plan is meant to empower employees with the right tools, so they can make informed decisions about their benefits.
Actions should include meetings, seminars, webinars and presentations that engage and educate the workforce. Bring in healthcare experts to provide a deeper, more thorough presentation. Hold benefits fairs and similar events to involve everyone. Events that are interactive and require people to seek out information from in-person experts may help employees who feel overwhelmed by a thick packet of paper.