As HR leaders in the knowledge worker space, one of the challenges you might face is improving the benefits literacy among your remote and hybrid workforce.
The issue of benefits literacy is growing, with only about 10% of employees reporting that they feel confident they understand everything they need to about their health insurance options, according to a report from UnitedHealthcare. This same report found that less than half of employees (47%) felt very confident that they understood common health insurance terms.
Aflac's Workforces Report showed similar concerns, with 92% of employees simply choosing the same benefits year after year because they don't understand their options. These statistics demonstrate the pressing need for improving benefits literacy among the workforce.
Rapid changes in health plans and the health insurance industry can lead to confusion and miscommunication. Lack of education about these changes compounds the problem, leaving employees with unanswered questions and potential gaps in coverage. This article aims to address the most common questions your employees might have during open enrollment and provide practical tips for navigating the process. So I'll spend a little bit of time outlining the essentials for those who are newer to the industry.
For Employers
What is a typical timeline for Open Enrollment?
The open enrollment period typically runs from November to December as the majority of employer sponsored plans renew on January 1st.
However, specific timelines may vary depending on the employer's policies and health insurance provider. If you are new to this process, it is essential to check with your broker for the exact dates of your open enrollment period.
What is the ideal timeline for Open Enrollment?
Open enrollment should be a 12-month preparation and deployment.
Unfortunately, most find themselves trying to cram all of the work into a 3-4 month period which only complicates the process and creates more opportunities for mistakes, poor communication, and frustrated employees.
As an HR professional, you should plan for open enrollment well in advance and communicate the process to your employees early on and your broker should provide a 12-month service calendar that outlines the entire process in great detail.
What are the essential steps to ensure a smooth open enrollment process?
Start early: As mentioned earlier, planning and preparing for open enrollment should begin at least 12 months in advance. This will give you ample time to communicate with employees, educate them about their options, and address any questions or concerns before the official enrollment period begins.
Review your current benefits: Take this time to evaluate your current offerings, identify any gaps in coverage or areas for improvement, and make necessary changes.
Communicate with employees: One of the most critical steps is communicating regularly and effectively with your employees about open enrollment. Create a communication plan that includes multiple channels such as email, virtual meetings, and printed materials to ensure everyone receives important information.
Educate employees: As mentioned earlier, benefits literacy is essential for making informed decisions during open enrollment. Take the time to educate your employees about their options, common health insurance terms, and any changes in coverage.
Utilize technology: Consider using online tools or virtual meetings to make the enrollment process easier for remote employees or those who may have difficulty attending in-person meetings.
Address individual concerns: Make yourself available to address any specific questions or concerns employees may have during the open enrollment period. This will help ensure a smooth process and increase employee satisfaction.
Follow up: After open enrollment has ended, follow up with employees to confirm their selections and address any last-minute changes or issues that may have arisen. This will help ensure accuracy and prevent any potential issues down the line.
For Employees
Key Terms Employees Need to Know in Health Insurance
Preventive Care: These are healthcare services aimed at preventing or detecting health problems before they become more serious. Preventive care is typically covered at no cost to the employee under most health insurance plans, which can help them stay healthy and save on future medical expenses.
Premium: A premium is the amount you pay for your health insurance coverage. This can be paid by the employee, employer, or both, depending on the company's policy. It is usually paid monthly.
Deductible: A deductible is the amount you pay for healthcare services before your health insurance starts to pay. This means if your deductible is $1000, your insurance won't pay for anything until you've paid $1000 for covered services.
Co-payment: Co-payment, or copay, is a fixed amount you pay for a covered healthcare service, usually at the time of service.
Coinsurance: Coinsurance is your share of the costs of a healthcare service. It's a percentage of the amount we allow to be charged for services. You start paying coinsurance after you've paid your plan's deductible.
Out-of-pocket Maximum/Limit: This is the most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan pays 100% of the costs of covered benefits.
Network: A network is a group of healthcare providers, such as doctors, specialists, and hospitals that have an agreement with a health insurance company to provide medical care to its members.
Preferred Provider Organization (PPO): A PPO is a type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network.
Health Maintenance Organization (HMO): An HMO is a type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency.
Open Enrollment: Open enrollment is a period during which employees can enroll in or make changes to their health insurance coverage. This typically occurs once a year and allows employees to choose the best plan for their specific needs and budget. It is important for employees to carefully review their options during this time and make any necessary changes.
Exclusive Provider Organization (EPO): An EPO is a type of health insurance plan that offers coverage only if you use doctors, specialists, or hospitals in the plan's network (except in an emergency). You choose a primary care doctor who coordinates most of your care.
Consumer-Driven Health Plan (CDHP): A CDHP typically combines a high-deductible health plan with a tax-advantaged savings account. Employees can use the funds in their account to pay for healthcare expenses, and any unused money can roll over year to year. This type of plan gives employees more control over their healthcare costs and encourages them to be more selective in their medical spending.
High-Deductible Health Plan (HDHP): HDHPs are insurance policies with higher deductibles but lower premiums. HDHPs may be combined with a health savings account that allows individuals to pay certain medical expenses with pre-tax money, but do not cover first dollar expenses and thus can be frustrating for those who are not familiar with this type of plan.
This plan is typically more affordable for both employers and employees, but it's important for individuals to carefully consider their healthcare needs before selecting this option.
Health Savings Account (HSA): An HSA is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. HSAs are usually paired with a high-deductible health plan. Any unused funds in the account can roll over year to year, making it a long-term savings vehicle for healthcare expenses.
Health Reimbursement Account (HRA): An HRA is an employer-funded health plan that helps employees pay for qualified medical expenses not covered by their health insurance. Employers can contribute a specific amount to the HRA each year, and employees can use it to pay for eligible healthcare expenses.
Flexible Spending Account (FSA): An FSA is a special account you put money into that you use to pay for certain out-of-pocket health care costs. You don't pay taxes on this money. This means you'll save an amount equal to the taxes you would have paid on the money you set aside.
Generic Drugs: Generic drugs are copies of brand-name drugs that have the same dosage, intended use, side effects, route of administration, risks, safety profile, and strength as the original drug. They tend to be significantly cheaper than brand-name drugs and can save employees money on their prescription costs.
Communicating these terms to your employees can also help them better understand their healthcare benefits and navigate the complex world of health insurance. With a thorough understanding of these key terms, both employers and employees can ensure they are making the most out of their health insurance coverage.
Answering Most Employee Common Questions
It's common for employees to have questions about open enrollment, especially if they are new to the process. Here are some of the most common questions that might arise during this period and some ways that you can provide some clarity to your employees without overexplaining:
*THESE ARE SIMPLY EXAMPLES OF WAYS YOU CAN ANSWER OR THINK ABOUT ANSWERING YOUR EMPLOYEES QUESTIONS. MAKE SURE YOU REVIEW THEM BEFORE IMPLEMENTING.
What is the significance of open enrollment? Open enrollment gives employees a chance to review and make changes to their health coverage without restrictions or penalties. It's a crucial time for individuals to ensure they have the best possible coverage for their healthcare needs.
How do I select the best plan for me? Consider your current healthcare needs, budget, and preferred providers when comparing different plans. You can also speak to your HR representative for guidance.
What happens if I miss the open enrollment deadline? Generally, you will not be able to make changes until the next open enrollment period unless you experience a qualifying life event (e.g., marriage, birth of a child, job loss).
How do I know if my current plan is still the right choice for me? It's essential to review your current coverage and compare it to other options available. Consider any changes in your healthcare needs or budget that might warrant a new plan.
When is open enrollment? Open enrollment typically occurs once a year and the dates can vary. Your employer will inform you about the specific period.
Has there been a change in providers? This happens from time to time, but very much depends on the employers needs. It's important to read through the materials provided by your employer or insurance provider to see if any changes have been made.
What are the limits of my plan? Plan limits, such as maximum out-of-pocket expenses and coverage caps, can be found in your plan details.
Can I make changes to my health plan during open enrollment? Yes, open enrollment is the period when you can make changes to your coverage.
What happens if I miss the open enrollment period? If you miss open enrollment, you usually have to wait until the next open enrollment period to make changes, unless you experience a qualifying life event like marriage, birth of a child, or loss of other health coverage.
What if I already have job-based insurance? Even if you have existing job-based insurance, it's still a good idea to review your options during open enrollment to ensure you have all of the coverages that best suits your needs. Although there are some caveats to access major medical plans if your employer plan meets all of the minimum access and affordability requirements.
How do I add or remove dependents from my plan? You can add or remove dependents from your plan during the open enrollment period, usually through your employer's benefits portal or by contacting HR or your benefits administrator.
What are voluntary benefit options? Voluntary benefits are additional benefits that an employer can offer, like dental or vision insurance, that you can choose to add on at your own expense.
How does Medicare affect my options? If you're eligible for Medicare, it's important to understand how it interacts with your employer-sponsored insurance. Generally, if your employer has 20 or more employees, the employer-sponsored plan is primary.
Are there any new benefits or changes to my current benefits? We often update benefits packages annually, so it's important to review any changes. These will be outlined in the open enrollment materials.
What is the cost of my premium and has it changed? The cost of your premium can be found in your open enrollment materials. Any changes in cost should be clearly stated.
What kind of out-of-pocket costs can I expect with my plan? Out-of-pocket costs include deductibles, copayments, and coinsurance. The specifics can be found in your plan details.
What is the difference between in-network and out-of-network providers? In-network providers have agreed to accept your health insurance, usually at a lower cost to you. Out-of-network providers may not have agreements with your insurer, so you may pay more.
What happens if I want to change my plan after open enrollment ends? Typically, changes can only be made during open enrollment or following a qualifying life event.
What resources are available to help me understand my benefits? We provide resources like benefits guides or access to benefits counselors. Check your microsite for access to all of our materials.
Tips for Employees Trying to Navigating Open Enrollment
Here are some practical tips to help you navigate the open enrollment process:
Start early and give yourself enough time to review your options and make changes before the deadline.
Understand key terms and concepts to make informed decisions about your coverage.
Take advantage of any educational resources provided by your employer or insurance provider.
Consider using decision support tools, such as cost calculators or plan comparison charts, to evaluate different plans.
Reach out to your HR representative for any questions or concerns you may have.
Communicate any changes in your healthcare needs or family situation that might warrant a change in coverage.
Always review the plan's prescription drug coverage, especially if you or your dependents take regular medications.
Review the list of in-network providers for each plan. If you have a preferred doctor or specialist, ensure they are in-network.
Investigate any wellness programs or incentives offered by the plan. These can often help save money or improve health.
Keep an eye on the total cost of a plan, not just the monthly premium. Factor in deductibles, copayments, and coinsurance.
If you're considering adding dependents to your plan, understand the implications this will have on your coverage and costs.
Document the reasons for your decisions. This can be helpful if you need to revisit your choices or explain them to others.
Be aware of the open enrollment deadline. Set reminders so you don't miss this critical time to adjust your health benefits.
Conclusion
Open enrollment can be daunting, but with the right resources and information, it doesn't have to be. As an HR leader, you play a crucial role in supporting your employees through this process and ensuring they are well-informed to make the best decisions for their healthcare needs.
By understanding key terms and processes, addressing common questions and misconceptions, and providing practical tips, you can make open enrollment a smoother experience for both your employees and your organization.
Remember, an informed employee is a satisfied employee, so invest in educating and guiding your team through this important period. Let's work together to make the open enrollment season a success!
Are you ready to improve your open enrollment strategy? Reach out to Troy Vermillion today and schedule a consultation.
Together, we can ensure your employees have the knowledge and resources they need to make informed decisions about their health coverage. Let's make 2024 the best year yet for your organization's open enrollment process!
