What To Do When an Employee Misses Open Enrollment

Even with weeks of communication in advance, employees may report that they missed open enrollment at work. This can happen for a variety of reasons, including a change in family status, work or information overload, or challenges in navigating the benefits enrollment process.

Regardless of the reason, this situation can result in added financial burden on the employee, additional missed days due to lack of healthcare, and frustration for both employee and employer. While employers have little ability to bend the rules for employees when they have missed open enrollment at work, there are some options that can help remedy the situation.

Understanding Open Enrollment Periods

Open enrollment can feel overwhelming with all its details, but mastering its process is key to helping employees make informed decisions. By understanding how it works, you can ensure a seamless and stress-free enrollment experience for everyone.

What Is an Open Enrollment Period?

Open enrollment is a designated time when employees can review and choose the health benefits that work best for them and their families. These benefits often include options like vision, dental and healthcare coverage, as well as contributions to Flexible Spending Accounts (FSA) or Health Savings Accounts (HSA). The chosen contributions are automatically withdrawn from the employee’s paycheck, making the process seamless and convenient.

New hires typically have a 30-day window to enroll in the company’s health plans. For existing employees, changes to benefits can be made during the annual open enrollment period, typically 2 to 4 weeks in the fall, or after a qualifying life event such as marriage, the birth of a child, or a death.

Who Can Participate in Open Enrollment?

Eligibility for health benefits during open enrollment depends on the type of employees your business hires. Full-time, part-time, and contract workers may all be eligible, depending on your company's offerings and needs. For smaller businesses or startups, it might make more financial sense to provide benefits exclusively to full-time employees. However, offering any form of health benefits can be a powerful tool to help attract top talent and improve employee retention.

Qualified employees can enroll themselves and their immediate family members in the provided benefits. Keep in mind, the cost of coverage typically depends on factors such as the number of family members covered, the scope of the selected plan, and any optional add-ons chosen.

Who Is Responsible if an Employee Misses the Open Enrollment Period?

All employers have certain responsibilities to notify employees about benefits-related deadlines; however, the responsibility of registering for benefits and completing any required paperwork falls on the employee. As part of the open enrollment process, employers should make employees aware of what happens if they miss open enrollment.

If an employee missed open enrollment at work, they are generally no longer eligible to sign up for benefits unless one of a few special exceptions applies. If the employer gave proper notice to employees communicating open enrollment deadlines, there is very little that can be done to help the employee after the fact, so a proactive approach and providing detailed information before and during open enrollment works best.

Options for an Employee Who Missed Open Enrollment at Work

The most common option for employees who missed the 30-day enrollment period is simply to wait until the next enrollment period to register for benefits. However, this may not be practical, especially for employees with growing families. In some circumstances, employees may be granted a special exception that allows them to retroactively register for benefits outside the standard enrollment window.

Special Enrollment Period (SEP)

A special enrollment period allows employees to update or change their insurance plans outside the regular enrollment window. This opportunity is available when a qualifying life event, like a major change in their life circumstances occurs. Examples of qualifying life events that would make an employee eligible for SEP can include:

• Loss of existing health coverage
• Turning 26 and being dropped from a parent's coverage
• Change in number of eligible family members due to birth, death, adoption, or other family status change
• Moving to a new location and your employer-sponsored plan is no longer available
• Change in work hours or job position that could affect insurance eligibility

Affordable Care Act (ACA)

If an employee fails to register during open enrollment, they may be eligible to apply for health insurance through the Health Insurance Marketplace^®. This can serve as a possible option for employees who fall under the SEP and need health insurance coverage as listed under the Affordable Care Act. If an employee has missed the deadline or does not qualify under the employer’s insurance plan options, they may be able to apply through the government. Some may even qualify for a subsidy if they are living below the poverty level or experiencing other forms of hardship. Employers should stay up to date regarding ACA filing and reporting requirements.

Medicaid/CHIP Health Coverage

If an employee experiences a decrease in income, they may be eligible to apply for health coverage through the government's Medicaid and Children's Health Insurance Program (CHIP). Medicaid provides health insurance to low-income individuals, while CHIP provides health insurance to children of low-income families. Unlike the regular open enrollment period, individuals who are below the income thresholds set by the government's programs can apply for coverage year-round. To apply for benefits and verify eligibility, individuals should complete the online screener application.

Short-Term Health Insurance

Individuals who are in transition may qualify to register for a short-term insurance plan if offered in their state. Short-term insurance is a plan that provides health insurance for 30 to 90 days with a one-month extension with the same related insurance companies to act as a stopgap when there is a lapse in longer healthcare coverage.

To qualify, individuals must have experienced a loss in permanent coverage due to a job change, layoff, becoming a college student, or missing open enrollment. Short-term coverage is typically cheaper than traditional health plans, but only relatively healthy individuals will qualify. This option is designed to provide temporary coverage in case of emergency health situations until the employee can regain permanent health insurance.

How Can Employers Prevent Their Employees From Missing the Open Enrollment Deadline?

Missing open enrollment can be a costly mistake for employees, so employers should take adequate steps to help their employees through the enrollment process. When employees miss open enrollment and lose health coverage, this can add financial and emotional burdens that may affect their health, well-being, and productivity at work.

There are simple steps employers can take to ensure a successful open enrollment period. These include:

• Requiring waivers of coverage: Waiver of coverage documents verify that employees reviewed and declined benefits options during the open enrollment period. These waivers also protect an employee's ability to immediately enroll for benefits if they lose coverage from an outside health plan, such as a spouse's employer.
• Providing adequate notices: Giving employees multiple notices surrounding open enrollment can ensure that they are aware of the deadlines and have ample opportunity to complete their enrollment. Consider giving pre-open enrollment, during, and reminder notifications to all employees.
• Regularly educating employees: Providing multiple information channels during open enrollment can ensure that employees are well-informed and have the resources to make decisions about their benefits.
• Asking for employee feedback: Employees can be a great resource for offering suggestions about the best ways to structure benefits enrollment to ensure maximum participation.

Prevent Employee Missed Open Enrollment Periods With Paychex

Since there is little wiggle room with open enrollment deadlines, employers should focus on preventing employees from missing the annual deadline. Starting the conversation about open enrollment early and providing multiple information channels throughout the open enrollment period can help ensure that employees haven't missed open enrollment at work. If your HR team is already overloaded during open enrollment season, trusted HR consulting services can help lighten the load and generate ideas for the best ways to support your employees through open enrollment.