For businesses that provide healthcare insurance for staff, open enrollment is a hectic time of year. Collecting all the documents needed to assure employees are enrolled properly is a complex process that requires stellar organizational ability.
Whether you manage open enrollment for health insurance on your own or use an outside consultant, numerous reminders are sent urging employees to review their options, ask questions and get their paperwork in by the deadline so they don’t miss out.
Most employers have their open enrollment last anywhere from two to four weeks. It’s typical for companies to have their open enrollment period end a few weeks before they submit enrollment forms to benefit providers.
If an employer has their benefits plan start at the beginning of each year, they’ll usually conduct open enrollment in the November prior. However, there are companies that start open enrollment as early as September or October.
Every year, we hear from employers whose employees missed open enrollment at work. Some lacked the extent of HR focus it often takes to stay on top of helpful reminders. Some hadn’t even realized how important those reminders can be. Others did everything “right,” and the employee missed the mark.
We also hear from employees. Some only missed open enrollment by one day. Some completely missed new-hire enrollment period. Others had just discovered a missed qualifying life event window. The grievance we find the most disturbing is my employer forgot to enroll me in health insurance, because we know that’s a problem that’s easy to prevent.
Reasons aside, what happens if an employee does not enroll during open enrollment and they still want coverage?
Missing the open enrollment deadline could result in no coverage or no change(s) in coverage. When a staff member fails to submit their enrollment documentation on time for new coverage, they will have to wait until next open enrollment to join your plan(s).
If they fail to make any changes to their benefits elections during open enrollment, every previous election will remain in place, but they will have to wait until the next open enrollment period to make changes to their plan(s).
Employees who miss open enrollment can sign up for coverage outside of the OE period if they have a qualifying life event. The event would make them eligible for a special enrollment period (SEP).
Qualifying life events (QLEs) are determined to be significant enough to “qualify” employees to make changes to their health coverage and thus trigger enrollment. They revolve around two main categories: basic life events and loss of other coverage.
Basic life events occur when someone becomes eligible or ineligible to join the plan. When a child is born, for example, they can be added to the plan. For marriage and divorce, additions or deletions can be made. Events that open the special 30-day window for changing coverage include:
In some instances, employees lose health coverage, which can trigger the special 30-day window to change coverage. If an employee divorces, for example, their former spouse may remove them from another plan, giving them access to yours. The following cases of losing health insurance coverage can trigger special enrollment.
Change in employment status, as in:
Special circumstances that allow employees to make changes outside of the open enrollment period, including:
A special enrollment can occur at any time of the plan year. Employees who have a qualifying life event are allowed to opt in or out of coverage(s) during this time. The special enrollment period is limited: employees who have a qualifying event will have 30 days from the date of the event to make any additions, deletions or changes in their coverage. The only exceptions to regular open enrollment are the special enrollment periods that could allow an employee to join or change coverage. But special enrollment is only triggered by qualifying events.
A missed qualifying life event window has the same result as missed open enrollment. Miss the 30-day open enrollment deadline, and employees must wait until the next period to make any elections.
A best practice for business is to require waivers from any employee who declines coverage under an employer plan. Whether they have coverage from a spouse or parent or simply elect not to purchase, have the staff member sign a waiver acknowledging their choice that clearly outlines the implications of having to wait until the next open enrollment period.
Provided the employer has given ample notification, it is the employee’s responsibility to enroll themselves or their dependents into a plan or make changes to their coverage. If an employee fails to do so, the employer is not responsible for any losses they incur.
Some businesses may be tempted to try to work around an open enrollment mishap. Employers may consider asking the employee to resign for a short period of time, then rehire them, triggering a special enrollment qualifying event. This could prompt your insurance carrier to deny coverage. It’s important to check with your carrier to verify any required waiting period to reinstate benefits before you make a decision to ask an employee to resign.
Employers must stress that options for employees to gain healthcare coverage for the coming year are limited if they miss the open enrollment period. The consequences for the coming year could be devastating if there is a serious medical issue. The responsibility, however, ultimately belongs to the employee.