Open enrollment periods always bring a flurry of activity and urgency that often creates confusion. What do I have to include in an enrollment guide? Can I satisfy other reporting obligations using the guide? What do our employees really need to know about their benefit options?
Avoid the Kitchen Sink Approach
We have seen all manner and form of enrollment guides over the years and noticed a troubling trend toward an “everything-but-the-kitchen-sink approach.” We offer this helpful list to assist you in considering how to make your enrollment guide useful and understandable without overwhelming your employees. Equally important we offer some tips to help you understand that including certain information in your enrollment guide will not meet all of your compliance obligations.
Consider what an enrollment guide is: a guide for eligible employees to be able to enroll in the benefits you offer them. Think of it as a roadmap to help employees get from one point to another.
A good map will help a traveler navigate his route, but it will not tell him all of the rules of the road. Similarly a good enrollment guide will help employees make benefits choices, but it will not give them all of the detailed rules of each coverage choice.
Consider, too, what an enrollment guide is not: an SPD, an SBC, an employee handbook, a plan document. You certainly can include information aside from coverage choices and rates, but you need to understand there are only a few required notices that you can include and fully satisfy your compliance duties.
What you should exclude from an enrollment guide
We recommend excluding the following from your enrollment guide:
- Employee handbook – all employees need a handbook, whether eligible for benefits enrollment or not, so you should provide it during new employee orientation not during enrollment. Further, employees typically toss their enrollment guides when enrollment ends, so they won’t have important information, and you will bear the costs of producing duplicates. Finally, much of the information in the handbook has no bearing on employee benefits or the enrollment process, so it will be ignored.
- Marketplace notification – The ACA requires that employers give a notice to all employees regarding availability of Marketplace coverage with 14 days of hire. Thus, having the notice in the enrollment guide will miss an employee not eligible to enroll and will be untimely for anyone who does not receive an enrollment guide within 14 days of hire.
- Initial COBRA notice and forms – COBRA requires employers to explain to participants and dependents their continuation coverage rights and obligations no later than 90 days after coverage starts. Including information in the enrollment guide will not satisfy this obligation because not everyone who receives an enrollment packet actually enrolls in coverage. Further, including the notice in an enrollment guide will not satisfy COBRA’s dependent notice requirement unless mailed to employee’s home.
- Medicare Part D creditable coverage notice – First, if annual enrollment commences after October 15, an employer will not meet its obligation to provide annual notice prior to that date. Second, an employer must provide this notice under several circumstances (e.g., when prescription drug coverage changes) that will not be satisfied by having the notice in the enrollment guide.
What to include in an enrollment guide
We recommend including the following in your enrollment guide:
- Summary of Benefits and Coverage (SBC) and Uniform Glossary of Terms – The ACA requires plan sponsors to include these items with enrollment materials. You can include them in the enrollment guide or issue separately, but including them in the guide keeps all required information in one handy place.
- CHIPRA notice – Plan sponsors must provide this notice to plan participants annually before the first day of an employer’s plan year. Thus, everyone to whom an employer must provide notice would get one if put in the enrollment guide.
- Women’s Health & Cancer Rights Act notice -- This act requires plan sponsors to provide notice with enrollment and annually, so placing the notice in the annual enrollment guide assures compliance.
Various laws require you to maintain specific plan documents, issue particular notices and provide participants with certain information. Each document or notice is tailored to a specific purpose, however, so you can invite unintended trouble by trying to meet multiple obligations with one document, notice or form. If you remember that an enrollment guide exists merely as a tool to (a) present benefit choices and costs; (b) explain how to complete enrollment materials; and (c) provide important contact and source information to employees; you should be able to avoid some of the common pitfalls in drafting enrollment guides.