Employer’s Guide to Open Enrollment

Succeeding in business starts with building the right team. In Hawaii’s competitive job market, employers need to be attractive to employees just as potential hires must appeal to employers.

The result? Competitive employee benefits have never been more important. A large component of that is health care. The other important piece is voluntary benefits, of which 85% of employees see as increasingly important, according to a recent study. 

In terms of health care, the challenge is that navigating open enrollment for health plans isn’t always a clear cut process, and yet, it’s an important step toward taking care of your team in the upcoming year.

To help clear the air, in this article we’ll explain what open enrollment means, how it works, and what you can expect.

What is open enrollment?

Once a year, your health care provider reviews your policy and determines pricing for the coming year. That renewal period is what most people refer to as open enrollment. During open enrollment, health care providers roll out their updated rates and offerings for the coming year, and you have a chance to select the best plans for you and your employees.

Why does it happen every year?

Circumstances change, for providers, employers, and employees too.

• On the provider side, open enrollment is the time to make sure plans are staying compliant with new local and federal rules and regulations. It's also a time to adjust prices for inflation, and reassess risk.
• For employers like you, it’s your chance to look at how your organization may have changed in the past year, and adjust your offerings accordingly. For example, if you added a new layer of management this year, you may want to review and adjust your benefit groups and their offerings for next year.
• Finally, open enrollment is also a time when employees can reassess their own needs, and select the plans and coverage that makes the most sense for them and their families. They’ll have the opportunity to switch plans, add a dependent, or opt out if needed.

What's the process like?

Open enrollment is a multi-stage process:

1. Providers evaluate current plans. Long before it gets to you, providers kick off the open enrollment process by evaluating their prices and services, and determining what adjustments to make to their current plans. Factors that go into price increases include inflation, rising health care costs, and new prescription drugs.
2. Employers review their options and choose their plans. Once you receive your plan options, if you're happy with your rates and coverage and want to keep changes to a minimum, you can renew your plans for the upcoming year.But if a different plan would
   better suit your company’s current needs, this is your opportunity to make any adjustments to your offering. At the same time, you can decide how much you will contribute toward the cost of each policy, and what the employee’s share of the cost will be.
3. Open enrollment for employees begin. After your select your employee offerings, it's now their time to choose their health insurance plans and coverage for the next year. Employees can renew their current plan, or switch to a plan that best fits their current situation and budget. This is also their opportunity to select any voluntary benefits they'd like to utilize in the next year like 401(k) retirement plans, or Flexible Spending Accounts, for example. 
4. Selections are finalized and new coverage beings. Once employee selections are completed, they're enrolled in the plans they chose, and coverage begins on the date stated by the insurance provider.

When is open enrollment? 

The timing of open enrollment depends on your insurance provider. If you provide your employees with health benefits through a PEO like ProService Hawaii,  you’re part of a larger health insurance policy. That means the policy will renew at the same time each year, not the anniversary of when you joined.

At ProService Hawaii, open enrollment for employers typically begins in mid-August to mid-September, with employers selecting their plans by late-September to early October. The deadline for employees to make their selection is early November, with all coverage beginning January 1.

What steps can I take to prepare?

As an employer, you play an active role in the open enrollment process. Here are some steps you can take to prepare.

• Start by learning about your employees’ needs. You can use an employee survey to get information on their health and financial needs, or solicit feedback about your current health plan offerings, and what voluntary benefits they’d like access to in the upcoming year.
• Understand your needs and prepare a budget. A significant part of open enrollment is setting your goals and budget for the next year. Planning ahead will help you decide which plans make sense for you and your team.
• Match your needs to available plan options. Now that you have your priorities for the next year, you can review available plans and rates for the next year to assess which ones best meet your needs and budget.
• Communicate with your employees. Once you’ve selected your plans, let your employees know about their upcoming open enrollment. Make sure they know that their selection is important—e.g. barring a qualifying event such as marriage, divorce, or the birth or death of child, they'll have to stick with the options they select until the next open enrollment period.
• Finally, keep important dates and deadlines top-of-mind. Give yourself, and your employees, plenty of time to complete the process.

The power of partnership 

Open enrollment is something every employer has to deal with. Whether your top priority in the new year is attracting & retaining talent with diverse benefits, or getting the most competitive rates on the local market—an HR partner like ProService Hawaii can help.

With a partner like us, you get:

• All the building blocks necessary to create a competitive benefit package. From health plans and retirement plans, to voluntary benefits that support your team’s health, wealth, and lifestyle too.
• Competitive rates to meet your budget. With 36,000+ worksite employees, we leverage our group's buying power to negotiate the most competitive local rates, with trusted providers you and your employees can depend on.
• Local expertise, every step of the way.  As a ProService partner—not only do you get powerful benefits—you get expert support from real local people who're passionate about helping employers and their teams succeed in Hawaii.

Want to learn more? Download our free ebook: The Benefits of HR Partnerships in Hawaii.