The Ultimate Survival Guide to Open Enrollment

What is it?

Open enrollment is an annual period when an individual or employee can add, drop, or make changes to their medical, dental, and vision insurance. It is also an opportunity for those with employer-sponsored insurance to sign up for other employer-sponsored benefits. It usually lasts between two and six weeks and often occurs in the fall, but some employers have different open enrollment periods.

For employer-based and individual coverage, open enrollment is the only time one you switch or sign up for a new health insurance plan. The exception is if you qualify for a Special Enrollment Period (SEP) triggered by a Qualifying Life Event (QLE). For employer-based coverage, open enrollment is usually the only time you can drop coverage. For individual marketplace coverage, you can drop coverage at any time of the year.

What does it include?

Data shows that 80% of Americans spend less than an hour researching one of the most important decisions they’ll make all year: their health coverage. Because researching healthcare options can feel like a chore, during open enrollment, roughly 90% of Americans choose the health plan they had the previous year, despite any changes in health.

During open enrollment you will make choices about what plans work for you covering medical, dental, and vision insurance coverage, as well as potentially opening a tax-advantaged savings account, such as a health savings account or flexible spending account.

Medical

During open enrollment you will be able to choose between plans for medical insurance that best suit your needs, and the needs of your family. These plans can include:

• A Preferred Provider Organization or “PPO”, which refers to the network coverage your health plan gives you access to. If you get your healthcare with providers who are in the network of plan, you pay less than with providers outside the network. However, you may still get some coverage with out-of-network providers.
• A High-Deductible Health Plan or “HDHP”, often cheaper than a “traditional” health plan which often features lower premiums, full coverage for preventative care, and minimum deductibles and out-of-pocket maximums set annually by the IRS. These can be paired with a health savings account to help offset the costs and provide additional tax savings.
• Health Maintenance Organizations (HMOs), a type of health plan that offer lower premiums, lower deductibles, and a more limited network of healthcare providers. Often HMOs consist of a network of providers limited to one geographical area or company.

Dental and vision

You will also have an opportunity to choose additional plans, such as dental and vision coverage. Similar to health insurance, you may have a variety of plans at different prices to choose from, which will give you access to different levels of care and different networks of providers. Vision insurance may include a certain amount of money towards new glasses or contact lenses each year.

HSAs and FSAs

HSAs and FSAs are both tax advantaged accounts that enable you to set aside pre-tax money to pay for qualified healthcare expenses. While they both enable you to save money on medical-related expenses, they have different requirements.

A Health Savings Account is a tax-exempt financial account that you can use to save for and cover the cost of eligible medical expenses. To be eligible for an HSA you must have a high-deductible health plan. HSAs are portable and never expire, meaning you can take them with you if you switch employers and health insurance providers and the balance rolls over year-to-year. Contribution limits for HSAs are set by the IRS each year. To see how much you can save on taxes and healthcare spending, use our HSA savings calculator.

A Flexible Spending Account works with any health plan and is offered through your employer. Employees can contribute pre-tax dollars from their paycheck to these accounts in order to pay for medical care, supplies and other services. There are three different types of FSAs, which can be used for different purposes:

• Healthcare FSA
• Dependent Care FSA
• Limited Purpose FSA

Employees must use their FSA money within the calendar year. The IRS sets contribution limits for FSAs each year. Use our FSA savings calculator to see how much you can save on your taxes and healthcare-related expenses with an FSA.

To see what expenses are eligible for coverage or reimbursement from your HSA or FSA Use our interactive, searchable database.

Details for individuals and employees

Whether you get coverage from your employer or purchase it from the health insurance marketplace, knowing when your open enrollment period is and having a plan on how to approach it is important. Even if you want to keep your same coverage, it’s important to review your plan and options, because your plan may have changed, including cost, network of doctor’s, and prescription drug coverage. Below we outline important factors to keep in mind before, during, and after open enrollment.

What are the dates?

It’s important to know when your open enrollment period is because if you miss the window to sign up for or change your benefits you could be without insurance, or have coverage that doesn’t match your needs, for another year. Health insurance companies require a specific sign up period to counter adverse selection - the tendency to only buy insurance when you are sick and forgo it when you are healthy.

If you get your insurance through your employer, ask your HR leader about open enrollment dates. Most schedule open enrollment in the late fall, commonly starting November 1. However, dates and the length of the open enrollment period varies by employer.

For coverage through the healthcare.gov marketplace for next plan year open enrollment dates are typically as follows:

• Open Enrollment begins November 1
• Enroll by December 15 for coverage that starts January 1
• Open Enrollment ends January 15

However, states with their own exchange can have different open enrollment dates, so be sure to check what applies to your specific state.

In addition, you can apply and enroll in Medicaid or the Children's Health Insurance Program (CHIP) any time of year.

What is a qualifying life event?

There are a few exceptions when you can change or update your health insurance plans or coverage, which are referred to as a “Special Enrollment Period.” These can include:

• Marriage
• Divorce
• Birth or adoption of a child
• A death in the household
• Changes in residence (e.g. moving zip codes, leaving incarceration, moving to or from a shelter to or from traditional housing)
• Loss or change of employment,
• Loss of health insurance
• Becoming a US citizen
• Changes in your income that affect the coverage you qualify for
• Gaining membership to a federally recognized tribe

These are often referred to as a “qualifying life event.” Some benefits, like a Health Savings Account, can be opened at any time during the year.

Important considerations

As open enrollment approaches take time to consider your healthcare needs and any upcoming changes. Will you be experiencing a major life event, like starting a family, getting married, or moving? Will you need a different type of coverage in order to meet you changing needs?

Also think about whether you used your current plan this year. How much did you use your insurance coverage? Were you happy with the doctors you had access to and the level of care you received? Is what you’re paying for coverage now working for your budget? Assessing what you need from your coverage will help you make the best choice of care for you.

Use our calculator to compare health insurance plans and figure out what type of plan is right for you and your needs.

Best ways to prepare

To make sure you’re prepared for open enrollment follow these five steps:

• Make a plan: Understand your benefit options and when the period starts and ends.
• Know what’s changed: Costs, such as deductibles and copays, your network of doctors, and prescription drug coverage all may have changed this year, even if the plan name and administrator are the same.
• Define what you need from your healthcare coverage this year and take into account any major life changes.
• Compare plans to find one that can better suit your needs.
• Consider additional benefits that support financial wellness and help reduce costs, like an HSA.

Overall, open enrollment means options. It is an opportunity to ensure that you have the healthcare coverage you need, are prepared for the unexpected, and can take advantage of all of the benefits your employer may offer.

Important open enrollment terms

There are many healthcare terms that are crucial to your understanding of healthcare plans and are important to be familiar with when considering healthcare options during the open enrollment period. Being familiar with some of this vocabulary can help you better review, compare, and select health insurance plans during open enrollment season. For a more complete list of terms and definitions, read our Glossary of HSA and Healthcare Terms.

Plan start date: Open enrollment has begun, but that doesn't mean as soon as you sign up for health insurance, your plan will start. Your effective plan start date is when your coverage begins. Make sure you understand when your coverage begins so you don't get stuck with a medical bill and no insurance to help you cover the costs.

Monthly premium: These are the monthly set costs for your health insurance coverage. It is likely the easiest part to understand in this process.

Co-pay: These costs are typically associated with PPO plans. They are the set costs, designated by your insurance provider for service.  They are also often required at time of service.

Coinsurance: This is the amount that you pay as a percentage (%) of the total cost of service. Your insurance plan will cover the rest.

Deductible: Deductibles are set yearly amounts that individuals (and families), must meet before their insurance coverage begins. This is crucial to understand because even though you are paying a monthly premium on day 1, until you meet and exceed your deductible limit, you are still responsible for 100% of your health costs.

In-network vs. Out-of-network: From a technical perspective in-network providers have contracted rates with your insurance company, while out-of-network do not. For you (or your family), this likely means different coverage levels and costs (typically higher for out-of-network providers and services). Make sure you double check that your primary care doctors (and even specialists) are included in your list of in-network providers (or plan for the expected higher costs accordingly).

Annual out-of-Pocket maximum: This is the maximum amount you could pay in the plan year. In the case that you have a large medical cost, this maximum limits your total payment requirement (and risk). After you meet this maximum, your insurance company will pay the rest of your qualified medical expenses. This is a key insurance parameter to limit your financial exposure.

Qualified medical expense: Understanding what procedures, prescriptions, and related health costs are covered as part of your plan can drastically alter the value it provides for you. These lists can be long and cumbersome and can even set limits on the total expenses per category (like physical therapy visits for example). While it is hard to plan for unexpected costs, comparing your expected procedures and expenses for the next year, can help you understand any additional out-of-pocket expenses you might incur. In addition, under IRS regulations eligible qualified medical expenses can be used for your FSA or HSA tax-free dollars. Lively has compiled a full list of HSA abd FSA eligible expenses to search, review, and purchase via the HSA or FSA store.

Details for employers

It’s critical for employers to get open enrollment right. On average, employees only spend 18 minutes enrolling in benefits each year, and that’s without factoring in the unprecedented pressure the ongoing pandemic and worries about inflation has placed on employee time and attention spans. However, 70% of employees rank healthcare as one of the most important benefits employers can offer according to Lively’s Wellness and Wealth Report. As a result, driving employee engagement during open enrollment is crucial.

Open enrollment is a busy time for employers, especially for HR departments and benefits administrators. It can also be overwhelming for employees. Because getting the right mix of benefits, and ensuring employees sign up for them is critical for recruiting and retaining employees, we’ve compiled the resources you need to ensure a successful open enrollment.

When do most companies schedule enrollment?

For health plans starting on January 1, most employers schedule their annual open enrollment towards the end of the calendar year, often in November. However, for companies with fiscal years that start on different date, they may choose a date closer to the end of their specific fiscal year.

New hires are often able to sign up for health insurance when they join a company, outside of open enrollment, though some may have a 30-to-90 day waiting period before health coverage begins. Employees that experience a qualifying life event can change their coverage outside of open enrollment.

How long does it last?

Generally open enrollment lasts between two to six weeks. Employers must ensure that employees have enough time to review their options and ask questions, but the time period must be short enough to ensure employees take action and don’t forget to enroll in benefits coverage.

Best practices for employers

Employers must begin planning for open enrollment several months in advance. Planning ahead ensures that you are prepared to support employee engagement and are offering your employees the best benefit options. For detailed information and open enrollment checklists, download our Open Enrollment Survival Guide.

Mid-year, before open enrollment:

1. Assess your current benefits offering

• What are employees using the most? The least?
• Survey employees to ensure your benefits are offering the flexibility, choice, and the ability save employees need
• Review plan performance from your benefits providers in order to make informed decisions

2. Adjust your benefits offerings
3. Drop options are ineffective low popularity benefits options
4. Add options that maximize employee savings or choice, such as a high-deductible health plan combined with an HSA if you don’t already offer one

What can employers do to prepare?

Break your open enrollment planning into three phases and set measurable goals for each to ensure employees get the most out of open enrollment:

Before

• Create an employee communications plan
• Meet with your benefits broker and schedule time for them to talk with employees
• Create an internal website or folder to drive employees to a centralized source for information
• Send out open enrollment preview communications to highlight new options, plan changes, and sign up for information sessions

During

• Position benefits as resources for employees
• Send regular communications through multiple channels to drive engagement and action
• Make an employee to do list
• Host regular, virtual information sessions and drop-in virtual office hours
• Host an employee “Ask Me Anything” with your benefits provider

After

• Survey employees about what worked and what did not
• Hold retrospective meetings and discuss:
• Is employee use of benefits increasing or decreasing?
• Are employees and employers saving more money than last year?
• Provide annoying education so employees can access and maximize their benefits

For a printable checklist to make your open enrollment planning easy, download our Open Enrollment Survival Guide.

For detailed communications plans, email templates, shareable infographics, and explainer videos visit our employer open enrollment resource center.

How can offering an HSA or FSA drive engagement and reduce your tax burden?

Adding an HSA or FSA to your benefits offering during open enrollment can help your employees get the most out of their health insurance and save you money in the process. Both employer and employee HSA contributions made from payroll are FICA tax exempt, so you benefit from tax savings for every contribution. You can use our savings calculators to see how much both you and your employees can save with these tax-advantaged accounts.

• HSA employer payroll tax savings calculator
• HSA savings calculator for employees
• FSA savings calculator for employees

If you’d like guidance on adding an HSA or FSA to your benefits package, reach out to us at Lively.

Details for brokers

Employers of all sizes rely on benefits brokers and consultants to be their partners as they try to do more with fewer resources, while driving employee recruiting and retention. Employers are increasingly leaning on their vendors as experts in the field who can not only help them choose the best options for their employees, but can also support the execution. In fact, a recent study found that 83% of brokers are being asked to help contain healthcare costs and 71% have clients struggling with employees’ dissatisfaction with their benefits.

By planning ahead brokers can ensure they are prepared for open enrollment and can support their clients and help drive their success. For checklists, information, and ready-made communications plans to share with your clients, download our Open Enrollment Survival Guide and visit our Open Enrollment Resource Center.

How to ensure success

We put together these five steps to help you get ready for open enrollment and ensure you have everything you need for a successful season.

1. Evaluate your processes and your experience last year

• What worked? What feedback did you receive from clients that you can implement to improve your process?
• How can you improve communication with clients, more efficiently answer frequently asked questions, and reduce repetitive tasks?
• What feedback have you received from your clients about their benefits offering? Are there new platforms that may be a better match for them?

2. Ensure you are up-to-date with the latest insurance changes and benefits trends

• Clients are relying on your expertise to help them navigate a confusing and increasingly complex and expensive healthcare landscape.
• Research insurance rates, any changes to the plans you offer in your geographic area, and healthcare legislation.
• Identify new benefits trends and add offerings that your clients may be requesting that could respond to current employee needs.

Meet with your existing groups

• How have their needs or business changed in a way that warrants a shift in benefits offering?
• Are they adding or reducing headcount?
• Opening a new location?

Record your data

• Ensure you keep records of all the information you get from your clients so you can make the best recommendation.

Quote and help your clients finalize their offerings

• Present your quotes and supporting information to your clients and ensure all the plan options you're sharing meet ACA requirements and state and local ordinances.
• Once your offerings are finalized, collaborate with your clients to provide employee education to support engagement and benefits adoption.

How to support your clients

Open enrollment is a busy time for both brokers and their clients. By supporting your clients during this hectic time of year you are making yourself more valuable to them and it’s an important touch point in your relationship. To ensure your clients are getting the most out of open enrollment, and the plans that you put together, take the follow steps:

1. Plan ahead

Make time to meet with your clients ahead of time and review their open enrollment plans and identify ways you can support them and resources you can provide to make the process more efficient.

2. Offer multi-channel communication resources

Employees all have different learning styles and process information differently. To help your clients best education their employees about their benefits options give them access to materials, help them develop their internal benefits presentations, and help them to create a communications schedule that will keep benefits interesting and top-of-mind but doesn’t inundate employees with too much information. You can also use Lively’s Open Enrollment Resource Center for materials to share.

3. Focus on customer service

Just like the benefits plans they offer, your clients expect a prompt, helpful response from you when they have a question or concern about their benefits offerings. Ensure you focus on answering their questions personally and promptly and point them towards any further resources that might help address their issue even faster in the future.

4. Make benefits selection and implementation easy

The health insurance and benefits landscape is constantly changing and it’s impossible for employers and employees alike to stay on top of it all. You can be a trusted partner to your clients by using your expertise to not only help employers make good decisions, but to communicate those decisions to their employees and support their employees health, wellbeing, and productivity.

Get started with Lively

If you are looking to offer a highly-rated HSA or FSA this season, Lively can help you meet your needs and those of your employees and clients. Lively’s easy-to-use platform, top-rated mobile app, and straightforward integrations can ensure that you can get up and running in weeks, not months. Our dedicated customer service team is also with you every step of the way. Reach out to us or learn more about our HSA accounts to get started with Lively.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.