Enrolling Employees, Changing Coverage

Once an employee meets your eligibility requirements, you can provide either that the individual is enrolled automatically (by you) or that the individual has to take steps to enroll. If your enrollment process is not automatic, you should do the following:

• Provide the employee with clear information about the plan choices, including coverage levels and costs, and clearly specify in writing a deadline date and time by which that employee must enroll (usually no more than 31 days after they are eligible to enroll). Usually, the plan information will be provided by your insurance company for distribution to employees.
• Specify to the employee the consequences of not enrolling by the deadline.

Should you allow employees to opt out of the plan? If you want to make sure that your employees have coverage, you could impose a requirement that they either enroll at the minimum level or certify that they have coverage under another plan. However, if employees will have to contribute to the cost of the premium, you shouldn't force them to enroll. To protect yourself, you might ask them to give you written notification that they do not want coverage. By doing so, you'll have proof that you offered insurance in the event that an employee says that you didn't allow access to the health plan.

Health care reform. The enactment of the Patient Protection and Affordable Care Act (ACA) and related legislation will require employers with 50 or more employees to offer adequate health coverage or be subject to assessment if their employees receive premium tax credits to buy their own insurance. This assessment is effective as of 2014 and is applied per each full-time employee.

In addition, effective for health coverage open enrollment periods beginning on September 23, 2012 and later, the ACA requires group health plans to provide a Summary of Benefits and Coverage (SBC) to employees. A properly prepared SBC summarizes a health plan's benefits and coverage in plain language and in a standardized format so that employees can understand, compare and evaluate their health insurance options.

Employers can satisfy the requirement of preparing and distributing the SBC through the insurer. However, as an employer, you are a responsible party for preparing and distributing the SBC, so even if you outsource your health benefits administration, make sure this requirement is complied with.

See the Department of Labor's website for detailed information on the content and format requirements for the SBC, as well as a SBC template.

Another requirement imposed by the ACA is that by March 1, 2013, employers are required to notify employees about state health insurance exchanges, whether the employer's plan meets minimum coverage requirements, and how to access premium subsidy information for exchange-based health coverage. Consult the government's website for information on your state's health care exchanges and fulfilling this requirement.

Making changes in coverage. Your insurance company may impose limitations on when you or your employees can make changes in the coverage. Often they will allow changes to be made only under certain circumstances known as family status changes or changes in work status. Family status changes include events like:

• marriage
• divorce
• death of a spouse or dependent
• birth or adoption of a child

Changes in work status include:

• a change in an employee's spouse's employment (e.g., being fired or getting a new job)
• a change in an employee's work hours (from full-time to part-time or vice versa)
• an unpaid leave of absence

When these events occur, your employees may want to add or remove family members from their coverage. Be sure you know up front when these changes will be permitted.