What is Open Enrollment?
Open enrollment: A period of time when employers and carriers allow employees to change their insurance elections.
Because open enrollment restricts the time frame during which people can sign up for health insurance, HR administrators and their brokers handle a lot of questions and policy changes all at once.
Traditionally, open enrollment is inefficient. First, there are endless forms for employees to fill out. Then the employer has to scan or fax the forms to their broker for review. Whoops, there’s an error, so it’s back to the employee for corrections.
Then to payroll to find the right amount to be deducted from an employee’s paycheck. Finally, you alert the carriers through a variety of platforms—mail, faxes, email, web forms—depending on the company.
But of course, that isn’t the end. Next comes the record maintenance. Each and every time there’s a change, you’re back in the middle of the paperwork.
Open Enrollment Terminology
We want to help you brush up on essential health insurance terms so you can enter your company’s enrollment process confidently. Here are the most commonly used open enrollment terms and definitions you need to know!
The company providing the insurance coverage.
A law that requires continuation health coverage to be offered to workers and their families when it could otherwise be lost due to a change in employment status. COBRA generally applies to employers with at least 20 employees that offer group health coverage.
A fixed amount that an individual pays on the spot each time you visit a doctor or fill a prescription. Your copayment amount is printed on your Health Insurance ID card. Copays are used to cover a portion of the cost of a doctors visit or medication.
A portion of the medical cost you pay after your deductible has been med. Coinsurance is a way of saying that you and your insurance carrier each pay a share of eligible costs that add up to 100%.
The amount you pay each year for most eligible medical services or medications before your health insurance begins to contribute to the cost of covered services.
An individual, typically a child under age 26, for whom a parent, relative, or other person provides healthcare.
The date an insurance policy goes into effect and coverage under that plan begins.
Evidence of Insurability (EOI):
Also known as a statement of good health. Benefits are available to all employees with proof of health status. EOI will only apply to some benefits, such as disability, and life plans.
Flexible Spending Account (FSA):
An employer-owned account that helps you pay for medical expenses. Although there is a maximum on the amount you may contribute annually, both the employer and employee may make deposits into this type of account.
Coverage that is available to all employees without evidence of insurability (proof of good health).
Health Maintenance Organization (HMO):
An HMO is a comprehensive one-stop-shop for all of your healthcare needs. It has the most structure and regulation of any other plan, so you’ll have to stay within your HMO network for all of your services. You will have one Primary Care Physician (PCP) for all of your appointments.
Health Reimbursement Arrangement (HRA):
An account owned by your employer to help you pay for medical expenses. There are no limits on the contributions that employers may make on this type of account.
Health Savings Account (HSA):
A personal bank account that helps you pay for medical expenses. You do need a healthcare plan for this type of account, and there’s a limit to the maximum amount you can contribute to your HSA annually. Both the employer and employee may contribute to this type of account.
A fixed monthly payment to an insurance company. An employer can pay some, most, or all of the monthly premium depending on the plan chosen.
The facilities, providers, and suppliers one’s health insurer or plan has contracted with to provide health care services.
The time an employer’s benefits renew and employees are able to change their coverages. Most employers hold ‘open enrollment’ 2-4 weeks before the effective date.
Out of Pocket Maximum:
This is the most you could pay for covered medical expenses each year. The amount includes money you spend on deductibles, copays, and coinsurance. Once you reach your annual out-of-pocket maximum, your health insurance will pay your covered medical and prescription costs for the rest of the year.
Preferred Provider Organization (PPO):
A PPO allows for the maximum amount of freedom and an extensive plan network. With this option, you are responsible for managing your health and need no referral to see a specialist.
How long an employee must work for a company before their benefits become effective. Waiting periods are set by the employer.
A life event that allows a person to make changes to their benefits mid-year including marriage, divorce, adopting or having a child, and losing other coverage.
Download a PDF version of our Open Enrollment Glossary:
The Pros of Enrolling Online
Benefits administration and enrollment can be complex, confusing and extremely time-consuming for agencies, employers, and employees. And to make the process even more challenging, many groups are still enrolling on paper.
Dramatically simplify and streamline the process this year by having all of your groups enroll online. See how an online benefits administration platform makes open enrollment easier for you and your clients!
On average, employers with paper benefits administration spend north of an hour per enrollee completing tasks such as duplicate data entry. The strain of manual administrative responsibilities like entering employee information, distributing and collecting multiple forms, and preparing benefits packets haunts HR administrators every year during open enrollment.
And paper enrollment makes it tough on brokers as well, who are tasked with organizing and reviewing mountains of paperwork and quickly become the middle man communicating election information and policy changes to carriers and employers alike. An online platform collects, stores, and maps data so that you don’t have to. The takeaway? Time savings – and likely less frustration – for everyone.
Significantly reduce the risk of error inherent in manual data entry by moving your groups online. Between indiscernible handwriting, blank fields, typos, and incorrect information – just to name a few common challenges brokers face with paper forms – there is so much room for error.
These hundreds of tiny mistakes add up to not so tiny dollars and hours of reconciliation. SHRM (the Society for Human Resource Management) estimates an error rate of 3% occurs on total benefit premiums when the administration is processed manually. Give yourself, and your clients, peace of mind with an online platform. You can be sure you’re staying compliant with a best-in-class HRIS that automates the data collection process and integrates with carriers, drastically reducing the opportunity for error.
Expand Benefit Offerings.
As processing enrollment manually is such an arduous task, employers are often resistant to offer a wider variety of plans for fear of the manpower needed to do so. Additionally, many employers are concerned they won’t be able to keep track of numerous plans and ancillary options, not to mention the likelihood of more confusion for employees trying to understand the nuanced differences between each plan in a 50-page benefits booklet.
Give your groups the ability to offer additional options without the additional paperwork! An online benefits administration system organizes, manages and communicates plan details in an easily digestible and digital format. From customized messages from the employer to helpful videos and links, all the information employees need to compare plans is available during the process in one central hub, making it much easier to offer additional coverage options without adding confusion for employees or more work for employers and HR administrators.
41% of employees feel the open enrollment process at their company is “extremely confusing” and 49% say making health insurance decisions is always “very stressful” for them. Ensure employees have a more positive open enrollment experience and are more engaged in selecting their benefits with online enrollment.
In bringing the process online, there is often more clarity around benefits. Additionally, employers, employees, and brokers all have access to benefit information and real-time resources, which in turn increases understanding and satisfaction for all parties involved – and drastically reduces the number of questions your agency is tasked with answering.
How to Ensure Open Enrollment Success
BerniePortal was born out of a brokerage, so we’re very familiar with how difficult open enrollment can be. Many, many rounds of paperwork, strict deadlines and seemingly never-ending client support. It’s a lot, and we want to make sure you get through open enrollment successfully, and with as little stress and pain as possible, so we’re sharing our wealth of knowledge (gained from experiencing more than a few open enrollments) with you now.
If you haven’t already started preparing for open enrollment, don’t wait any longer. While this time of year is always going to have hiccups, preparation will help you minimize these challenges.
Brokers and HR administrators can work together to plan ahead with a strategic schedule.
A benefits and HR platform makes open enrollment easier. It doesn’t have to be a never-ending cycle of paperwork and record maintenance. With a benefits platform, you’re able to streamline enrollment, reduce errors, cut the paperwork with an easy-to-use tool to manage their changes throughout the year.
A benefits and HR platform saves time, and employees will have a more positive open enrollment experience and become more engaged in selecting their benefits.
Plan on communication
When it comes to open enrollment preparations, studies show planning and designing employee communication campaigns lags behind other readiness activities. However, lack of communication can lead to confusion which can ultimately lead to lower participation rates. A study by SHRM found that 41 percent of employees feel the open enrollment process at their company is “extremely confusing” and only half described their benefits communications as informative.
This year, set a few communication-based goals. Using a benefits platform allows you to share additional benefits information in multiple ways, and while it may initially seem like more work, by stepping up your communication game you will be increasing your odds for higher participation rates.
Open Enrollment Technology
As you well know, open enrollment is inefficient. But there is a better way. With an online benefits administration platform, you can cut the paperwork, reduce errors, and make it easy for to maintain and update records—meaning less time in perpetual support mode.
With a benefits administration platform, you’re able to streamline enrollment, reduce errors, cut the paperwork, and manage changes throughout the year.
Instead of paper forms and benefit guidebooks, everything’s online. Employees can review the Explanation of Benefits, as well as any documents you provide to illustrate new offerings or changes in their benefits.
Employees easily make their elections through the portal. The shopping cart function makes it simple to understand what each plan option costs, as well as what the employer is paying and what employees’ payroll deduction will be.
BerniePortal is industry-leading in its integration capabilities, which makes communicating employee elections to carriers easier than ever. The option you use will be based on carrier availability.
After open enrollment, BerniePortal makes it easy to review elections and make revisions, as well as maintenance and benefit summaries year-round. Whether it’s a new hire or a new baby, employers and employees can make changes and maintain accurate records directly through BerniePortal.
The open enrollment experience is far easier to manage online than on paper. Employers are starting to pick up on this as well—online benefits administration is quickly becoming the industry standard.
Here are 5 things to consider when shopping for a ben admin platform:
1. Do employees make elections in the system?
For maximized efficiency, look for a system that allows employees to actually review and choose their benefits directly within the platform. The alternative would be a system that houses information manually uploaded by HR.
There are two key reasons to look for a genuine enrollment system. First, an enrollment system minimizes the possibility of human error, as opposed to a manual-entry system. The second reason is that if you don’t have it, then you’re basically just having your employees enroll with paper – which is what you’re trying to get away from in the first place.
2. Is the benefits feature broker-supported?
If not, the system is probably not as robust as what most organizations will require.
The most advanced benefits systems are actually provided to employers through a benefits broker, which creates another level of support. Systems not supported by a broker likely have big gaps in functionality – gaps that keep brokers away.
Even small employers needs to think about this. Why? Because the size of the employer has little to do with the complexity of the benefits package. Brokers provide key expertise here and a system that works in tandem with the broker produces the best results.
3. Does it connect with the onboarding system?
After onboarding, most new hires want to make their benefits elections. It can be handy to have these two functions connected to ensure compliance, eligibility, and ease of use for the new employee.
4. Does it administer qualifying events?
Look for a system that can handle enrollment both during open enrollment and in the case of qualifying events, such as marriage, a new baby, loss of coverage, or other scenarios. Many benefits systems allow employees to self-service. In other words, they can update their own information in regards to qualifying events or benefits changes. If the system can only handle benefits elections during open enrollment, you will still have to maintain paper processes for other events.
5. Does it administer a full array of benefits?
Consider whether the system can handle a full array of benefits, including life, critical illness, dental coverage and more, as opposed to just the major medical plan. A benefits system reduces the administrative burden of offering several lines of coverage, so choosing a platform that can administer many types of coverages will allow employers to take advantage of those efficiency gains.
Because benefits touch so many parts of the HR ecosystem, in general, a comprehensive system that integrates benefits with other HR functionality will provide more value than a less robust system. Considering these five questions will help HR leaders find the right solution for their organization.
Here are a couple ways vendors should be supporting brokers and employers during open enrollment. If you aren’t getting this level of customer service, you may want to consider whether you have the right platform:
A quick turnaround
This applies to customer service issues in general—how quickly does your support team member get back to you? Are you constantly waiting for a response? Has it caused issues with your clients or employees?
But in particular, this also applies to build outs. While implementing during open enrollment, how quickly is your vendor able to build out groups? BerniePortal completes build-outs in one to three business days, compared to weeks or even months with other platforms.
Your vendor should provide a variety of resources for both your agency and your vendor should provide a variety of resources for both brokers, businesses, and employees. You should be able to easily find information on the platform’s features, uses and best practices, as well as share that information with your clients. BerniePortal provides daily demos, a searchable Knowledge Base, a Resource Library, and regular webinars with our leadership team and industry experts.
Here are a few examples to get you started:
Post Open Enrollment
Congrats! You’ve survived another open enrollment season (hopefully with our tips and some new technology, it was less stressful than previous open enrollments). Now what?
While you should be celebrating, there’s still more to do to ensure long-term success and happy clients all year long. Here are the steps you should take after open enrollment season to guarantee success in the coming year:
Define what worked and what didn’t work
While the experience is still fresh in your mind, take the time to document any areas of improvement you noticed this year. Did employees seem like they understood their options? Were they aware of deadlines? How were errors or questions handled?
A common mistake that HR leaders and brokers often make is letting employee benefits communication fade once open enrollment is over. While it is important to ensure employees understand their options when they’re trying to make elections, it’s equally important to maintain communication throughout the year. Schedule regular reminders around how they maximize the value of their benefits.
There’s no denying it–open enrollment is tough, but that doesn’t mean it has to be even harder because of inefficiencies, errors and tight deadlines. It is possible to have a less stressful, more successful open enrollment period, and we hope this guide helps make that possibility a reality.
Test your open enrollment knowledge! Take our 10 question quiz to see if you’re a healthcare guru or a novice: