When you consider that health care and other benefits account for almost a third of an employee’s average total compensation, open enrollment season is critical. The types of health benefits plans employers offer can make a significant difference to employee well-being and job satisfaction. “A company’s benefits package is both a retention and recruitment tool, helping to keep employees, as well as attract top talent and new hires,” says Michele Cusack, senior vice president and chief financial officer at Northwell Health. On top of that important consideration, the cost of benefit packages impacts a company’s bottom line.

What is the Open Enrollment Period (OEP)?

The annual OEP is a designated time each year when eligible employees can enroll in, modify, or cancel their health insurance plans. This period typically occurs toward the end of a company's fiscal year to align with the start of the new plan year. During this window, employees can make health plan adjustments to their medical, dental, vision, life insurance, dependent care, critical illness insurance, and other benefits without needing a qualifying life event. Employers typically provide detailed enrollment information and resources to help employees make informed decisions about their benefits. This period is crucial for enrolling in or modifying employer-sponsored benefits programs, which may include health savings accounts (HSAs), flexible spending accounts (FSAs), and other fringe benefits.

Who qualifies for open enrollment?

Open enrollment is available to a wide range of individuals, including employees, their eligible dependents, and active members of certain benefits programs. The eligibility criteria can vary depending on the company, the type of insurance, and the specific benefits plan.

Research and preparation are key to ensuring your company offers the best possible benefits package. These steps can help as you gear up for the next open enrollment period.

1. Make open enrollment a year-round priority

Open enrollment occurs toward the end of a company’s fiscal year, allowing employees to enroll, change their current benefits, or drop health coverage for the start of the new plan year. During this window of time, your employees may be hyper-focused on their options. But it behooves employers to think about benefit options throughout the year. “Review the questions that employees have for human resources or their health insurer to get a sense of where you’re meeting their needs or falling short,” says Matthew Kurth, deputy chief people officer at Northwell. You can also glean information by sending out periodic electronic surveys or hosting focus groups with current employees. When deciding on what to offer, companies should consider employee needs and past usage, their out-of-pocket expenses, and whether access to in-network providers is convenient and provides high quality.

2. Consider other health insurance options

These days, there are a lot more options to take into account. One you might consider is a narrow or tiered network, an option that may provide greater value for your health care spend. “Narrow networks encourage members to use more efficient health care alternatives, either by restricting networks to the most efficient providers or by having different copays and coinsurance for providers in different tiers of the network,” says Cusack. A potential benefit to a narrow network is that you have the ability to reduce fees in anticipation of increased patient volumes, says Carol Battaglia, assistant vice president for benefits at Northwell. “These networks are also designed to provide high-quality and better outcomes for patients since they focus on higher-value services.” There are also self-funded insurance plans. In these plans, companies pay all or part of their employees’ medical claims directly, setting aside funds for this purpose. That means the company takes on the financial risk if claims are high. That said, “the biggest advantage of self-funding is the potential for cost savings,” says Cusack, when claims are lower. Companies that choose self-funded plans are wise to weigh month-to-month fluctuations in costs against potential overall savings.

3. Raise employee awareness about all employee benefits

Open enrollment provides the perfect opportunity to remind employees about all the valuable benefits available to them. “Most employees review health-related offerings, and may overlook the chance to maximize retirement benefits or open a health savings account,” says Cusack. While employees can make changes to retirement plans year-round, communication during open enrollment can educate them about a company’s matching program and other options like parental leave, mental health services and employee assistance programs (EAPs).

4. Communicate often, effectively, and simply

The right forms of communication are critical to ensuring employees have the information they need to make the best decisions during open enrollment. “An easy-to-navigate employee portal with accessible benefits information is key,” says Kurth. “You also need to send regular communication to employees throughout the year, reminding them that this tool is available.” Personalizing the communication using information about an employee’s past benefits utilization can also make a difference. “Personalization conveys that you’re in tune with what they want and need,” says Kurth. “It also ensures that an employee gets the information that’s relevant to their physical, mental, and financial wellness.” Kurth recommends that companies tap into what they learned during the height of the pandemic to disseminate fast, clear communication. “Present the information in a simple, straightforward manner,” he says. “Electronic correspondence and virtual or in-person team meetings can ensure employees don’t miss out on maximizing their benefits package during open enrollment.” More creative options that employers used to connect to and share information with employees during COVID-19 lockdowns, such as virtual town halls that can be recorded and replayed later, can and should continue to be utilized, says Battaglia.

Contact us to learn more about effective ways to prepare your company for open enrollment season.