Top 10 Employee Benefits Omissions

Once a year many employees have the opportunity to elect their benefit plans for next year. How benefits communications are handled can be found all over the communication spectrum.

Some employers provide pre- and post-communications, as well as detailed personalized enrollment materials. Employers less communication-savvy send an email reminding employees that they have until the deadline to make any changes.

But most employers land somewhere in between.

No matter how the annual benefits enrollment is communicated, there are key details that often get overlooked but can be critical to a smooth transition into the new benefits year.

Here is my top 10 list of most missed items:

1. When to elect a PCP. If you are changing to a new HMO Health Plan, you must elect a Primary Care Physician (PCP). Many times, employees check to see if their doctor is on the new plan, but they don't officially select them with the new health plan. Doctor's visits are not covered by the new plan until the PCP has been selected.

2. Major coverage changes for health plans. Employees need to be aware of any major changes to covered services so they can make an informed decision for themselves and their family.

3. Coverage tier rules for life insurance changes. Many plans only allow you to move up one tier at a time when increasing life insurance coverage. If the new election skips a tier, the employee may be contacted at a later date to drop their coverage down.

4. Dental coverage election rules. Many plans do not allow employees to drop dental coverage for less than two years. For example, an employee cannot elect to have dental every other year. Once they opt out of dental, they have to be out of the plan for two years until they can elect to get back in. Someone who has opted out for one year may be surprised when they go to enroll the following year.

5. Maximums for FSAs. Although there are federal guidelines, each employer can set their own maximum for dependent care and health care flexible spending accounts, as long as it does not exceed the federal maximum.

6. Rates for benefit plans by pay period. Employers communicate new annual rates, the cost the employer and employee pay together, and percentage increases. To be the most clear, the new employee cost should be indicated in dollars by pay period.

7. The cost savings associated with pre-tax benefits.Many employee-paid costs are pre-tax including health care plans, dental plans and FSAs. Employees can really benefit from knowing how they can save in taxes by making appropriate benefit elections.

8. When you can change coverage other than annual enrollment. Many plans do not allow changes during the year unless there is a qualified change in family status. Usually an employee has 30 days after the event to make the change. Annual enrollment is a good time to reinforce this regulation.

9. Which benefits require an enrollment. If no election defaults to current benefits, clearly state that "if no action is taken, benefits will continue." If flexible spending accounts require re-enrollment, that must be communicated also.

10. Who to contact with questions. In all annual enrollment communications, there should be a phone number or email for someone to address questions.

Comments

[Deb]

I work for a company that violates all of these. I never know which benefits I have, when I can change them or what are the upsides of different plans.

Do companies have departments that communicate benefits? I assume this is part of HR.

[Christine Miller]

Deb,
Benefits communication is usually a function of HR. If it's a small company, it may be part of another department. Due to the resources and effort it requires, many companies outsource this function to companies like Millerwood. At a minimum, each benefit plan offered (Blue Cross, Harvard Health, United HealthCare, etc.) should have plan descriptions so you can make educated choices. Perhaps you can ask your HR department to request materials from each provider.

[Dan]

I think benefits communications is one of the most important functions of HR. A company can have the best benefits program, but if the options and details aren't communicated in a clear, concise way, everyone loses.

[Christine Miller]

Dan,
Yes, one of the ROIs for employers is that employees feel good about benefits as part of their compensation. The hope is that this leads to loyal, productive and healthy employees. If this is not achieved, employers are providing a high-cost benefit with little in return.