How to prepare for open enrollment as an employer

If you're an employer with a limited budget, you may find it hard to offer employee health benefits. But a personalized benefits package that includes quality health coverage is necessary for your organization to compete for talent.

With low unemployment, today's workers have more room to consider an employer's benefits before accepting a job. In addition to health insurance benefits, employees want benefits that enhance their mental health, improve satisfaction, and support a work-life balance.

Open enrollment season offers you the perfect opportunity to determine if your compensation package meets these demands. This article outlines five key strategies for preparing for open enrollment season and showcasing your employee benefits package.

Takeaways from this blog post:

• Open enrollment is a set period of time for Americans to enroll in, renew, or change their individual health coverage through the Health Insurance Marketplace.
• Preparing for open enrollment involves setting a budget, tailoring benefits to employees' needs, and creating a communication strategy.
• Providing resources, making enrollment easy, and using virtual platforms are effective strategies to help employees navigate their health insurance options during the open enrollment period.

What is open enrollment?

Open enrollment is the dedicated window of time for Americans to enroll in, renew, or change their health coverage. If they’re seeking an individual health policy, they can do this through the Health Insurance Marketplace, state-based exchanges, or private exchanges. This is the only time individuals and families enrolled in a Marketplace plan can change their current coverage outside of a special enrollment period (SEP), which requires a qualifying life event. Open enrollment ensures individuals don't wait until they get sick to enroll in or switch to a more comprehensive type of plan.

The exact open enrollment dates for Marketplace coverage vary depending on which state an individual lives in. For states on the federal Health Insurance Marketplace, open enrollment runs from November 1 through January 15. However, Americans must enroll by December 15 if they want their health coverage to start on January 1.

Some states with their own exchanges allow residents to enroll in healthcare coverage until February. Idaho has a shorter enrollment period, ending on December 15.

If you're an employer that offers a group policy through the Small Business Health Options Program (SHOP) or a private insurance company, your open enrollment period may be during a different time of year. But, if you offer a stand-alone health reimbursement arrangement (HRA), your employees will use the ACA open enrollment to enroll in or change their individual health insurance plans.

Communicating details about open enrollment ahead of time is a great way to tell employees about their coverage options.

Here are five ways to prepare for open enrollment.

1. Set your benefits budget

If you're preparing to launch a new or revamped health benefits package for this year's ACA open enrollment period, you must know how much you can afford to spend. Setting a budget will keep you focused and realistic as you choose your benefits.

Health benefits are often the most expensive perk to provide. But, they're also the most desired employee benefit. According to our 2024 Employee Benefits Survey, 92% of employees rated health benefits as important. So if you have the budget, splurging on this benefit may be a great way to increase retention and recruitment.

If you're an employer with a small budget, there are affordable alternatives to costly employer-sponsored group plans. One alternate option is an HRA. HRAs enable employers to provide tax-free reimbursements to their employees for their individual health plan premiums and other qualifying out-of-pocket costs.

Some examples of HRA-eligible expenses include:

• Doctor visits
• Emergency care
• Preventive care
• Over-the-counter medication
• Prescription drugs
• Mental health counseling
• Chiropractic care

If you have fewer than 50 full-time equivalent employees (FTEs), you can offer a qualified small employer HRA (QSEHRA). The QSEHRA is an affordable healthcare option for small employers looking to provide their staff with quality health benefits. Its simplicity makes it a great choice for employers offering a health benefit for the first time.

For employers with more than 50 FTEs, consider an individual coverage HRA (ICHRA). An ICHRA works like a QSEHRA in that it is a more cost-effective alternative to group health insurance. But it’s for employers of all sizes and offers greater flexibility by allowing customization by employee classes.

Suppose you're interested in a group policy but want to save on monthly premium costs by switching to a high deductible health plan (HDHP). In that case, you can supplement your group health insurance coverage with a group coverage HRA (GCHRA). With a GCHRA, you can reimburse employees on your group plan for eligible out-of-pocket costs the plan doesn't cover.

Besides a health plan, you should also budget for other fringe benefits you want to offer, like the following:

• Paid time off (PTO)
• Life insurance
• Wellness programs
• Retirement plans
• Parental leave
• Flexible work schedules

Employers pay about $11.60 per hour on average for employee benefits¹. That equals almost 50% of a typical employee's hourly wages, bringing their total compensation to nearly $36 per hour per employee. In total, almost 32% of the average employer's costs go toward benefits.

These averages vary depending on your industry and how much you choose to spend. But they're an excellent place to start when creating your benefits budget. You should consider what benefits are mandatory and what voluntary benefits you want to offer to attract and retain employees.

2. Tailor your benefit options to your employees

Open enrollment season is the perfect time to review your benefits package, as it can play a major role in reducing turnover. But this only works if your employees see value in your offerings. That's why tailoring your benefits to include the perks employees want most is essential.

Creating an employee benefits survey to gauge your employees' satisfaction with your current benefits is a great place to start. You can also ask them what other benefits options they want to see at your company.

From there, you can review the employee feedback. This helps you determine how to customize your benefits package to meet your employees' needs.

While the open enrollment period tends to focus on medical coverage and health plans, employees expect more when they see an updated benefits package for a new plan year.

Ensuring employees understand how you support them creates trust and a great employee experience. So, it's vital to collaborate with your employees to provide benefits that offer the most value for them.

Adding or changing a few benefit selections could be the difference between retaining or losing good employees by showing them you're committed to their health and happiness.

3. Determine a communication strategy

After you choose your benefit offerings, you must communicate which benefits are available and when open enrollment will be for your organization.

Employees tend to value a variety of benefits. But research has found that 85% of workers can find their coverage options confusing². So you must do more than send your employees materials and expect them to read the information at their leisure.

Simplifying your benefits options and communicating their value is an effective way to provide your employees with vital information.

Your open enrollment communication strategy should start early and span many channels, such as:

• Group meetings or town halls to discuss benefit changes and new offerings.
• Availability for one-on-one sessions with the HR team or benefits specialists to answer any questions.
• Periodic open enrollment reminders via email updates. Be sure to include key enrollment dates and specific instructions.
• Messaging that designates relevant points of contact for further questions and concerns, like HR, the Health Insurance Marketplace, and benefit vendors.

Using multiple communication channels helps employees make their benefit selections on time and get their questions answered.

Allow plenty of time for questions, encourage personal conversations to explore options further, and explain your benefits to those hesitant to speak up in a group setting.

If you've made any changes to your current benefits, share the updates with your employees and thank them for their input if you decide based on their feedback. Employee morale is positively impacted³ when your staff sees the value of their contribution and opinions.

If you offer an HRA or plan to offer an HRA for the new year, you’ll want to start telling your employees about open enrollment. That way, they can find an individual health plan that works for them.

4. Provide resources to your employees

Many employers provide resources for educating employees about their benefit offerings. These resources can include webinars, benefit fairs, email campaigns, digital enrollment materials and guides, videos, health insurance marketplace updates, and presentations.

Virtual resources are impactful because your staff can use them throughout the year, and active employees can save them for reference when the election period comes around.

For example, if you have online benefits material for last year's open enrollment, you can make changes for 2025's enrollment and distribute the information well in advance.

The enrollment process for health insurance can be challenging for your employees. So, you can consider providing an individual health insurance broker as a resource. Brokers are health insurance experts with vast knowledge about various health coverage topics, changing health reform, and rising medical care costs to guide your employees through the process.

However, each individual plan type has many nuances, so your employees may need personalized support. If anyone needs help, be sure to provide contact information for the marketplace, health insurance carriers, vendors, or a benefits administrator.

If you offer an HRA with PeopleKeep, our award-winning customer support team and online help center are here to help you at the click of a button. We also provide enrollment support with a team of licensed professionals, ensuring employees find the health policies that best suit them.

5. Make it easy to enroll

In the past, employers could rely on analog processes to get their employees to enroll in benefits. However, with many employees working from home, virtual open enrollment is the most practical option for many employers.

While your open enrollment window may be fixed, it's crucial to make enrollment in all your company's benefits easy and inclusive for all your employees—no matter their location, time of day, or device.

The key to making open enrollment straightforward—whether it's enrolling for a health benefit plan on the federal marketplace or signing up to participate in your organization's perks—is meeting people where they are. Your benefits enrollment program should be accessible via desktop or mobile device.

To achieve this, you can create a one-stop benefit offering platform for your employees to find information and resources, complete the online application process, and enroll in the offerings they choose on a self-service basis.

Your virtual platform can have links to the marketplace for health insurance enrollment and a chat feature that’s ready to answer other benefit questions. The goal should be to direct your employees to your digital benefits platform, where they can access everything they need during the enrollment window—all in one place.

Conclusion

Showing your employees that you're committed to their health and well-being is more important than ever. Your benefits package can either reflect or detract from that commitment. By preparing early for open enrollment, you'll have time to tailor your benefits package and highlight all your available perks. This encourages your employees to make smart decisions about their benefits.

Providing resources, communicating early, and making enrollment easy are effective strategies for helping your employees navigate their health insurance market and enhance their experience throughout the enrollment window and beyond.

This article was originally published on August 10, 2022. It was last updated on August 13, 2024.

1. https://www.botkeeper.com/blog/a-guide-to-the-cost-of-employee-benefits
2. https://www.ameritas.com/insights/why-employees-are-confused-about-benefits-and-what-employers-can-do-2/
3. https://asana.com/resources/team-morale-tip