End of Year is Crucial for Open Enrollment
By Jame Geathers
It’s that time again – open enrollment season is upon us. If you are like most companies, your benefits term aligns with the calendar year so November and December are crucial months in your enrollment process.
If you’re new to open enrollment, this process can be overwhelming and stressful but it does not have to be. The open enrollment period, which began on Nov. 1, and ends Jan. 31 is now underway, so as a business owner there are a few things you need to know.
As you may be aware, if you employ fewer than 50 full-time employees, defined as an employee working an average of 30 hours per week or 130 hours in a calendar month, you are not required to offer coverage – although to attract and retain the best employees in a competitive market, most employers do.
If you opt not to offer coverage, as a small business owner under the Affordable Care Act you are still required to act. You must notify your employees that you do not offer coverage and that they may obtain coverage through the Healthcare Marketplace.
On the plus side, if you have 25 or fewer full-time employees and you choose to offer coverage you may be eligible for a nifty tax credit. Alternatively, if you employ 50 or more full-time employees you are required to provide coverage, notify all employees of the coverage available and it must meet the standard of affordability. If it does not meet the affordability requirement or if one or more of your employees cannot afford the plans offered and opts to purchase through the marketplace, you may face penalties and/or fines.
Once you have determined you are required to offer coverage, as an employer you are responsible for notifying your employees of the coverage you offer and if they may qualify for a subsidy in the healthcare marketplace.
There are two versions of the notice that are available for you to distribute to your employees, either provided by your insurance broker or found on the Department of Labor website. I strongly recommend that you distribute these notices to all employees – both fulltime and part-time – but if you choose not to provide them there is no penalty at this time.
Please be aware that as of 2016, if you employ 50 or more full-time employees you are required to offer coverage to at least 95 percent of your full-time employees.
This is another reason why providing the notice of available coverage is crucial. As an additional level of documentation, I would also recommend keeping a copy of the form in each employee’s personnel file.
Another employer responsibility is that your company is required to report pertinent details such as employees offered coverage, percentage offered to and how much the employee/employer contributions were. Specific details on the required information determined by the size of your business can be located on the IRS website.
Finally, be sure to give your employees ample opportunities to sign up for coverage. You have done your research, found a broker or a plan through the marketplace and now you are ready to kick off open enrollment.
Unfortunately, some of your employees may not share your enthusiasm.
This is where employee incentives such as wellness programs can help. Many insurers offer wellness programs, discounts and even prizes for covered employees. These programs can be extremely helpful for launching wellness initiatives and engaging employees.
Additionally, I recommend that you remind hesitant employees that insurance is no longer just a great idea – it is the law. Per the law, they are subject to a penalty/fine of 2.5 percent of the total household income or $695 per adult and $347.50 per child under 18 (maximum: $2,085 per household) – whichever is greater will apply.
If you need assistance treading through the waters of open enrollment or additional information, please visit: www.jamegeathers.com.
Jame Geathers is a Human Resources and Operations Professional with more than 12 years of experience in both the corporate and non-profit sectors. Jame has spent her career building and supporting HR infrastructures that have provided her employers and clients with the structure and policies that all start-ups need but owners may not have time to create and implement. For more information please visit the Jame Geathers Consulting website, www.jamegeathers.com or call (706) 496-9691.