Annual benefits enrollment, which for many companies will be in the coming months, typically lasts one to two weeks, but the preparation process begins several months in advance. For human resources (HR) and benefits teams, this period often involves a complex blend of strategic planning, system updates, vendor coordination, and employee communications. A well-executed enrollment period ensures that employees understand their options and are equipped to make informed decisions for themselves and their families.
Below are the key components necessary to lay the groundwork for a successful annual enrollment season:
Strategic Planning
Effective annual enrollment generally begins with thoughtful planning. Consider the following steps:
- Evaluating the prior year’s enrollment to identify what worked well and where improvements may be needed
- Assessing current benefit offerings and exploring potential enhancements or changes
- Negotiating with vendors to finalize plan design and pricing
- Establishing a timeline for key milestones, such as finalizing plan options, developing communications, and updating systems
System Configuration: Enrollment Portal and Payroll System
Confirm your benefits enrollment and payroll systems are accurately updated for the upcoming plan year, including:
- Configuring plan options and rules, such as the following:
- Preventing employees enrolled in a PPO plan from contributing to a Health Savings Account (HSA)
- Requiring enrollment in employee supplemental life insurance before allowing spousal or dependent coverage
- Resetting plan limits to reflect the correct amounts effective on the first day of the new plan year
Employee Communication and Education
Clear communication is a critical component to helping employees navigate their benefit choices. Consider the following:
- Tailoring communications to the demographics of your workforce and distributing information through multiple channels (e.g., email, intranet, printed materials)
- Providing reminders about enrollment deadlines
- Scheduling benefit education sessions, both online and in-person, along with open “office hours” for Q&A
- Publishing FAQs to proactively address common questions
- Sharing a summary of any changes to plan design or costs
Compliance Considerations
Annual enrollment is also an ideal time to distribute legally required notices to employees. Employers are also required to provide other notices and different points in the employment lifecycle, such as upon hire or when leave is requested under the Family Medical Leave Act.
Post-Annual Enrollment Follow-Up
Once enrollment closes, you should shift your focus to implementation and quality assurance by taking the following steps:
- Auditing employee elections for accuracy and compliance with plan rules
- Resolving discrepancies and correcting any system or data issues
- Confirming data file feeds to benefit vendors are accurate and timely
- Gathering employee feedback to inform future enrollment strategies
- Encouraging employees to verify their first paycheck after new premiums take effect to ensure proper enrollment
How We Can Help
Our team of employee benefits lawyers are ready to help HR and benefits teams prepare for annual enrollment, develop communications, review plan documents, and provide compliance guidance. Please contact the authors of this blog post or your Morgan Lewis contacts with any questions or if we can be helpful in ensuring your upcoming enrollment season is optimized for success.