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December 7, 2016 Experts Corner

Tips employers must heed during open-enrollment season

Submitted photo Lois A. Krause

As I was reading an article about the "eight mistakes people make during benefit renewals," I realized how much effort and investment human resources makes in employees’ benefit renewals every year.

Long before any documents are reproduced for distribution or new programs are uploaded to the company employee portal, HR has spent countless hours preparing for this all-important process.

With the cost of health care on the rise (I have seen between 4.8 percent to 35 percent increases with the same plans over last year) and the need for everyone to have some "cushion" from the possible crippling costs, organizations have the daunting task of reviewing the best possible programs for their employees while keeping an eye on their "bottom line" (no matter how big or profitable the organization is).

HR usually begins the process by investigating the latest rate increases there will be with the current carriers, and then, depending on their "experience rating" (how many dollars were spent on claims by the current insurance carrier in the past year) and "census age" (average age of the workforce in their organization), they negotiate with many carriers to get the best "bang for the buck" they can find.

Often, if they are lucky, they have a great benefits broker that can help them with this daunting task, but ultimately, HR has to be the one to try and select the best possible solution, and then "sell" it to senior management, or the board (depending on the organization). They must also consider the type of workforce they have and what types of programs will be accepted by that workforce. For example, do they want to consider a high deductible plan or plans, or a traditional one, or both?

It isn't always just the costs involved, it may also be the size of the network in each plan, whether they should investigate multiple plans, and the similarities and differences of the various plans. In my experience, I have found that comparing benefit plans is like comparing apples to avocados, instead of apples to apples (or even apples to oranges). One may claim to be similar to others, but there are always some differences that could make it unpalatable for your employees.

Once the "best" plan has been selected and shared with senior management and finance for approval, it is time to set up a strategic plan for the open enrollment meetings. All of the "best practices" must be incorporated to ensure that not only the employees receive and understand the information being presented, but employees must also find a way to share all of this information with the family members at home that are covered. This has to be done in a thorough and timely fashion.

One of the biggest mistakes is that some people just do not read the information presented to them, much less share it with family members.

I have a daughter that did that a couple of years ago. She is the daughter of an HR professional and was counseled to read the new plan documents that explained what the coverage would be in the upcoming year. The organization had multiple plans and she knew her current plan was very good when she had some medical issues in that year, so she selected her current plan.

Unfortunately, her current plan had plan design changes, and she wound up with much less coverage than she had previously. When she told me what she did, I told her she should know better and she agreed, but said she was too busy to read everything on the organization’s "benefit portal".

That is another red flag. Make sure that changes are highlighted and shown to everyone, in multiple ways, to ensure everyone involved gets to see the latest and greatest. More often than not, employees will realize too late that they made a poor choice and then come to HR to see if it can help them navigate the situation. Often, HIPAA (an act that prevents anyone discussing personal, patient medical information with anyone other than the patient -- unless they are the parent of a minor -- to ensure the medical information is kept private) prevents HR from making significant changes or inquiries on employees’ behalf.

When people think of benefits, they usually think of medical and dental insurance only. Often the organization has ancillary benefits that need explaining as well. Many have employee assistance programs (EAP), life insurance or the ability for employees to buy supplemental life insurance for themselves or their family members. There may also be short- or long-term disability plans, legal-protection plans, long-term care insurance or just reimbursement programs like AFLAC.

Often the organization will have either a health savings account (HSA) or health reimbursement account (HRA), which may or may not be partially funded by the organization to help defray out-of-pocket costs for high deductible plans. Many employees need to understand how much they would be responsible for, what is included in the fund and how much they should deposit themselves if there is no organizational contributions.

The best way to handle open enrollment is to ensure you know your employees, understand what works best for most of them and then add other methods to convey the programs, clearly, in English (or other languages if necessary) that is easy to understand and not "insurance speak."

I’ve usually found that if the organization provided documents ahead of time, giving people time over a weekend, before the open enrollment meetings occur, the organization had a better chance of having people review the documents with their families and then bring the questions to the meetings or to HR for clarification. Having a signature page that states that the employee read the documents and acknowledges that with a signature may help, but may also be very tedious.

Remember, benefits are part of employees’ compensation, so you want to ensure they understand what they are getting. If they don't, they will blame HR if they didn't understand.

Next year, you may want to enlist a group of employees to be on a benefit council to help with the communication piece, asking employees how they want to be informed, and then doing that.

(Lois A. Krause is a co-director, community outreach for the Human Resource Association of Central Connecticut, a dedicated group of HR professionals promoting excellence in the field.)

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