Benefits Enrollment: What You Need to Know

What is benefits enrollment?

Benefits enrollment refers to the process by which employees register for and sign up for their benefits packages. It is the period during which employees can sign up for or make adjustments to the plans and services provided by a corporation. This enrollment period applies to employers' workplace benefits, such as health savings accounts, flexible spending account plans, and dental, life, and disability insurance.

The benefits enrollment period is important because it ensures employees can enroll in the coverage they need while giving the employer time to administer the plans properly. A defined benefits enrollment window also creates a fixed time frame for budgets, payroll deductions, and benefits communication.

Related: Trends in Employee Benefits​

Benefits enrollment typically occurs when:

When you are first hired: As a new employee, you will go through the benefits enrollment process to select the benefits you want to enroll in, which will then become effective according to the company's policies.

During your employer's annual open enrollment period: Open enrollment typically happens annually and allows current employees to enroll in new benefits, modify existing benefit selections, and add or remove dependents from coverage.

When you experience a qualifying life event, such as getting married or having a child: In these situations, you are permitted to make corresponding changes to your benefits within a set timeframe, according to company policies.

The benefits enrollment process involves:

1. Reviewing benefits information provided by HR or benefits providers.
2. Electing which benefits you want to enroll in.
3. Choosing between plans offered by the employer.
4. Providing documentation for any dependents to be added to the coverage.
5. Making changes to existing benefit selections.
6. Reviewing elections for accuracy before submitting.
7. HR processing your elections and communicating with benefit providers and insurance carriers.

What is open enrollment for benefits?

Open enrollment is a period each year when employees may elect or change the benefit options available through their employer. Employees can enroll in new benefits, confirm existing benefits, or make changes during open enrollment. Benefits include health, dental, life insurance, and supplementary or optional benefits like legal services or pet insurance.

Related: 11 Employee Benefits Every Employee Should Have​

How does Open Enrollment work?

The employer receives updated benefit plans and premium information from their insurance brokers and benefit providers for the New Year.

The employer schedules an open enrollment period, typically lasting 2-4 weeks in the fall. During this time, the employer provides their employees with benefit plan details and options for the upcoming year.

The employees then review the available benefit choices and select the plans that meet their needs and budget for the next year. They enroll by completing paper forms or online.

Once open enrollment ends, the employer collects all the employee selections and confirms benefit elections with the providers. Any changes in benefit plans or coverage take effect on January 1.

The employer then shares enrollment information with the insurance brokers and benefit providers, such as employee names, coverage levels, and plan choices. This allows the providers to set up and administer the new benefit plans for the New Year.

Related: A Guide to Employee Benefits: An Employer's Guide to Good Practice​

When do most companies have open enrollment?

According to SHRM, open enrollment typically occurs in November for benefit plans with a calendar-year start date of January. This gives employees time to review their options, ask questions, and make decisions about their benefits for the next year.

The benefits enrollment period typically lasts 2-4 weeks to give employees enough time to review plan options, ask questions, and make their selections. During this time, the employee will be provided with details about the various benefit plans available and any changes for the upcoming year. Employees will fill out enrollment forms to specify their elections.

After the enrollment period closes, the benefit plans will take effect on the specified start date. Usually, this is January 1 for plans to start a new year.

5 things to double-check before finalizing your annual benefits enrollment selections

Your current coverage needs - Think about any medical, dental, or vision issues you or your dependents had in the past year that you expect to continue. This can help you determine if your current plans will adequately cover your needs in the future.

Plan costs - Compare premium costs, deductibles, copays, and out-of-pocket maximums for the different plans offered by your employer. Lower-cost options may have higher out-of-pocket costs but could still make sense, given your coverage needs.

Network coverage - Confirm that your preferred doctors, specialists, and facilities will be considered for your plans. Otherwise, you may have to pay more.

Added benefits - Consider if you would benefit from any benefits your options offer, like telemedicine, prescription drug coverage, dental/vision, health savings accounts, and flexible spending accounts.

Your circumstances - Think about any life changes like marriages, births, retirements, or moves that could impact your benefits needs going forward. Enrolling new dependents may alter which plans make the most financial sense for you.

Tips to help you prepare for open enrollment?

1. Know the open enrollment dates.
2. Confirm the plan options available through your employer or the marketplace.
3. Research the insurance company and ensure available providers match your needs.
4. Understand the open enrollment terms and jargon ahead of time.
5. Analyze the associated costs, including premiums, copays, and deductibles

Changing your benefits during the year

In some instances and circumstances, you can change your employee benefits outside of the formal open benefits enrollment period. Generally, as an employee, you have the option to modify your benefit selections when:

You have a change in family status: Getting married, divorced, having a child, or adopting a child.

You or a covered dependent lose other health coverage: For example, if a spouse loses coverage from their job. The benefits change must typically be made within 30 to 60 days of losing the other coverage.

The company changes its benefits plans or coverage options that impact employees: In this case, employees are usually permitted to make a corresponding change to their benefits election.

You have a change in employment status: For example, if an employee goes from part-time to full-time work, they may be eligible to enroll in benefits if they were previously ineligible.

You or a covered dependent move out of the health plan's service area: This only applies to plans where coverage is limited to a specific area.

There is a cost or coverage change to a benefit plan: If the plan costs increase significantly or coverage decreases in a meaningful way, employees may be able to make a change to their benefits election.

In conclusion, benefits enrollment periods provide you with an important opportunity to select and modify benefits that meet your needs. A well-run enrollment process helps ensure appropriate coverage that supports your health and financial well-being, reduces gaps and lowers costs.

References:

1. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/open-enrollment-benefits-guide.aspxhttps://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/open-enrollment-benefits-guide.aspx
2. https://www.healthcare.gov/glossary/open-enrollment-period/
3. ​https://www.thebalancecareers.com/benefits-enrollment-what-it-is-and-how-it-works-1919189​