The Most Common Pitfalls During Open Enrollment and How to Avoid or Address Them

Open enrollment is a critical period for employees to review and select benefits that will impact them for the entire year. However, it’s also a time when mistakes can happen, leading to headaches down the road (for both employees and those charged with administering the benefits plan).  

From missed deadlines to confusion about eligibility, navigating open enrollment can be tricky for employees and employers alike. As we find ourselves in the middle of another open enrollment season for our clients, we thought now would be the appropriate time to share some of the most common pitfalls that arise during open enrollment — as well as to offer our guidance on how to avoid or address them.

1. Forgetting to Enroll During Open Enrollment

One of the most frequent issues is employees forgetting to enroll before the open enrollment window closes. Unfortunately, once that deadline passes, correcting this can be challenging. Employers may feel compelled to make exceptions for some employees, but be cautious: making an exception for one employee means you'll need to extend that flexibility to others. Failure to do so could lead to compliance issues.  

To avoid or remedy such issues, maintain proactive and consistent communications throughout the open enrollment window. Also, be sure to monitor enrollment activity ongoing, conducting an audit to identify the stragglers, to whom you can conduct personal outreach directly.  

2. Making Changes Outside of Open Enrollment

A common question that comes up is whether employees can make changes outside of the open enrollment period, especially if they find out their spouse’s enrollment timeline at another job is different. While employees generally can’t make changes unless there’s a qualifying life event, it’s essential to communicate that clearly upfront.

Employers should ensure employees are aware of the 30-day window for making changes due to life events such as marriage, the birth of a child, or a change in employment status. Again, the plan administrator can make an exception, as it is largely up to the administrator to govern the plan. But if you make an exception for one, you need to make that exception for all. It is entirely reasonable and recommended that the employer draw a “line in the sand” somewhere, so that all changes are handled consistently and fairly but don’t extend out indefinitely. Again, whatever you decide, best practice would be to have it documented in the employee handbook.

3. Confusion About Which Employer’s Plan to Choose

When both spouses work, they often face confusion about whether they should enroll in their own employer's plan or opt for coverage under their spouse’s plan. Most of the time, the process for such determination will be outlined in the SPD or employee handbook, but it can still lead to misunderstandings.  

For example, if medical, dental, and vision benefit eligibility is based on seniority for two spouses who work for the same company, it’s important to understand who should enroll as the primary policyholder and who would be designated as the dependent spouse. Additionally, there may be specific limitations on life insurance coverage, so that spouses can’t be “double-insured” from a life insurance standpoint.  

Spouses who work for different employers need to carefully assess their personal health needs and evaluate the costs of each plan at each employer. Encourage employees to know which employer’s benefit plan offers better coverage or lower premiums before making selections during the open enrollment process they may later want to change.  

Another common scenario is this: Consider the case of a married couple, in which the spouses each work at a different company. Let’s say that both companies’ benefits plans are effective on January 1^st but each plan has a different open enrollment window. The question often arises, How do I know which plan to choose if I don’t know what my spouse’s benefits will be before my own open enrollment window closes? The answer to that is often similar to what follows in the following example below (making adjustments or correcting mistakes after the open enrollment window closes).

4. Fixing Mistakes After Benefits Have Been Used

Sometimes, employees discover mistakes and want to make corrections, only to realize that they have done so after they’ve already started using their benefits. Perhaps they enrolled in a Health Savings Account (HSA) and later found it to be too costly when the bill for the first service showed up in the mail. Unfortunately, once benefits are used, it’s generally too late to make changes. However, if an error is caught before the plan is used (for example, when the first paycheck of the new plan year reflects higher premiums), it may still be possible to switch.  

Employers don’t necessarily want to advertise this leeway too broadly, as it could invite a lot of unwanted and unnecessary administrative work. But it’s generally a good idea to include language in the open enrollment guide or employee handbook to the effect of: Reach out to HR if you have questions or concerns. This allows the plan to remain open to necessary changes, but doesn’t explicitly promote and invite changes, corrections, and exceptions to be made.  

Best Practices for Ensuring Smooth Open Enrollment

To minimize hiccups like these and to ensure a smoother open enrollment experience, here are a few key steps your employees can take prior to and during open enrollment:

• Assess Personal Health Needs: As noted above, encourage employees to think carefully about their own and their family’s health needs for the upcoming year so that they make the wisest choices during enrollment. This will avoid the common “mistakes” that can arise and cause headaches for everyone.
  

• Evaluate Costs: Make sure employees understand how much their chosen benefits will cost, both in terms of premiums and out-of-pocket expenses.
  

• Know About Spousal Surcharges: If your plan has any additional costs for covering a spouse who has access to other employer-sponsored plans, this should be clearly communicated, and employees should do the research themselves before making their plan elections.
  

• Print the Confirmation Page: A simple step that ensures employees have a record of their choices and can verify that everything went through correctly is to print off and retain a copy of the confirmation page upon completing open enrollment.
  

• Double Check the First Pay Stub: Mistakes can happen and surprises can arise, so it’s smart for employees to review their first paycheck after enrollment to ensure the correct deductions are in place and that no surprises go unnoticed until it’s far too late to make the necessary adjustments.  

Open enrollment doesn’t have to be stressful, if both employers and employees are well prepared. By clearly communicating deadlines, outlining the steps for choosing the right plan, and ensuring employees know how to fix mistakes promptly in accordance with company policy, you can reduce the number of enrollment-related headaches and help everyone feel confident about their benefits choices for the year ahead.

Want even more prep for what lies ahead this open enrollment season?

Join us for a complimentary webinar: “Open Enrollment Prep Workshop: Avoid Common Pitfalls and Compliance Mistakes During Open Enrollment Season.” Live on Wednesday, October 30^th, this workshop will cover best practices for open enrollment including communication and disclosure strategies, handling missed or mistaken elections, and enrollment for inactive and absent employees.  

Register using this link.

Eric W. Gregory of Dickinson Wright will lead the conversation which will also cover newer and developing requirements and challenges applicable to group health plans including Gag Clause Prohibition Compliance Attestations, Transparency in Coverage requirements, the new Affordable Care Act safe harbors, and recent disputes with insurers on “evidence of insurability” for life insurance plans.  

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