The Small Business Guide to Open Enrollment

Open enrollment is the annual time period for employees to join or make changes to their health care coverage for the coming year. For most employer and individual  coverage, open enrollment begins November 1, 2019, and closes December 15, 2019.

The remaining 16 days of the year are set aside for business and insurance carriers to process all the paperwork necessary to affect changes for the coming year. On January 1, 2020, all changes, additions, or deletions employees have made to their plans go into effect.

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Open enrollment can be a hectic time for HR professionals and small business owners. Open enrollment can be manageable and relatively pain free if you plan ahead and organize carefully.

Timelines for small business open enrollment: existing coverage 

If you already provide coverage for staff, open enrollment is an opportunity for employees to make changes or updates. It’s a matter of planning and processing paperwork.

Working with the November 1 to December 15 timeline, you’ll want to give your employees ample time to review their choices before they make their elections, so planning in advance is critical.

A best practice is to have all the necessary paperwork in employee’s hands for at least 1 month prior to the start of enrollment so they can review their options and ask questions.

Here’s a suggested timeline:

By September 1 

• Contact insurance carriers and request 2020 enrollment forms
• Ask carriers for notices of any changes to coverage for the coming year
• Notify employees open enrollment forms will be issued on October 1

During the month of September

• Create information/open enrollment packages for employees
• Include a cover letter, insurance update forms, an employee checklist, and any notification of changes to coverage your carrier provides
• Make sure to send information in additional languages if employees do not speak English as their first language
• Start sending notifications (weekly/bi-weekly) to employees that open enrollment information is coming soon

By October 1

• Issue open enrollment packages to employees
• Notify employees (email/text/signage) to look for their packages and start making their elections right away
• For remote workers, those on leave, or vacation, make sure to send packets to their home to arrive by October 1. Overnight carrier or return receipt mail is best

By November 1

• Enrollment opens on November 1
• Notify employees (email/text/signage) they can begin submitting their elections.
• Send weekly notifications to remind employees of the deadline
• Plan and set aside time to answer employee questions throughout the open enrollment period

On December 15: 

• It is the final day to submit changes, additions, or deletions

On December 16:

• Submit paperwork to carriers as needed
• Overnight carrier or return receipt mail is best

Small business open enrollment: New coverage

If providing healthcare coverage in 2020 will be new for your small business, you’ll want to start planning almost immediately. You have many options:

• Private carriers
• Professional employer organizations
• Association health plans
• Government plans for business or individual coverage

Private carriers

There are several options for small business owners looking to provide healthcare coverage for employees. You can contact insurance carriers directly — but this can be time consuming and complex. You’ll need to shop around for differing price points and levels of coverage. If you’re well-versed in insurance, this may be a way to save a bit on coverage, but plan on spending a lot of time understanding what you’re purchasing.

To help purchase private insurance, many small businesses work with an insurance broker. These professionals are licensed and do the shopping for you. Depending on your location, there may be a variety of options available ⁠— the broker can source and suggest the best choices in your range.

A third option may be a Professional Employer Organization (PEO). Essentially, this is a firm small to medium-sized businesses use to outsource payroll and benefits access and administration. Joining a PEO can reduce insurance costs because your workers join a larger pool the PEO serves. In healthcare, the larger the group, the lower the cost (typically). There is a charge for the services a PEO provides, typically a percentage of overall payroll.

Another option is an Association Health Plan (AHP). These groups, sanctioned by the Department of Labor in 2018, allow companies to band together, either by industry or geographic area, to create their own larger employee pool. These groups are generally created by chambers of commerce or industry associations.

A factor to consider — under federal law, an AHP cannot increase premiums or deny coverage for pre-existing conditions. Some states have additional requirements under AHPs, so it’s important to verify what coverage is available in your area.

A small business with 5 employees, for example, could join an AHP or PEO that has hundreds of members. This larger, insured pool typically lowers the cost of coverage per employee and can even provide better choices and plans.

Coverage through the government

For individual coverage, the Affordable Care Act sponsors the only government  insurance program. You can find coverage based on the marketplace in your state through the federal website. Individuals looking to purchase health coverage under the ACA do not need to wait for open enrollment to join, but will need to review and renew their elections every year at open enrollment time.

For group plans, the Small Business Health Options Program (SHOP) is available through the government to help small businesses provide coverage for medical and/or dental insurance to their staff.

To qualify, businesses can have no more than 50 employees. Depending on how many plans are available in your area, SHOP can offer a choice between multiple plans. Employers choose what level of contribution staff has to make to premium costs and you have the option to provide dependent care. You may also determine what wait time, if any, employees will have to satisfy before coverage begins.

Purchasing healthcare for your small business

For businesses considering adding new healthcare coverage, put together all the information you’ll need before looking for quotes and options.

Whether you’re working with a broker, third-party provider or looking on your own, you’ll want to be ready to answer these questions:

• How many employees will be covered?

For most businesses, only full-time employees qualify for insurance coverage.

• What waiting period, if any will apply?

Most employers require staff are on the payroll for at least 90 days before they are eligible for coverage.

• What coverage are you looking to offer? (Healthcare, dental, vision, life insurance, disability?)
• Will employee dependents be covered under the plan(s)?

Tax credits are available

Finally, if you’re considering providing coverage or are mandated to do so in your state or location, the Small Business Health Care Tax Credit can offset some of your costs.

For business with less than 25 full time or full-time equivalent employees who earn $50,000 or less per year, a credit is available if your organization pays at least half of  employee monthly premiums.

Less than 10 employees who earn less than $25,000 per year? Tax credits are even larger. The smaller the business, the higher the credits. Businesses can estimate what their credit will be through the government website.

Shopping for insurance can be challenging, but with a bit of planning and organization you can maximize benefits for you and your employees.