Does your employer offer you workplace benefits? Many employers do, even though they might not be legally required to do so. Although larger employers – those with at least 50 full-time employees – must offer health coverage or pay a penalty under the Affordable Care Act (Obamacare), smaller employers are under no such obligation.
Still, plenty of employers offer perks such as health or medical coverage, dental insurance, vision care coverage, life insurance, and more. Some employers pay all or part of the costs of the benefits, and employees pay the rest through payroll deductions. Employers get good rates on these benefits because they're part of group plan or group rate. Employees who opt to participate in the plans get to share this cost savings.
Typically, new employees decide which options they want when they fill out all of their first-day paperwork. But don’t worry; your choices aren’t set in stone. During "open enrollment," most employers give their employees the chance to change their coverage options.
What Is Open Enrollment?
Open enrollment is a window of time when employers (and their coverage providers) allow you to change your insurance "elections." Usually, this means that you can choose to add or drop coverage (for example, you may have passed on life insurance when you were hired, but later decide that you want that benefit). Typically, you can also change your coverage. If, for example, your employer offers a choice between an HMO and a PPO health insurance plan, you might decide to switch from one to the other during open enrollment.
Here are some benefits that might be on the table during open enrollment, if your employer offers them:
- Medical or health coverage. You may have the option of adding health insurance coverage, changing from one plan to another, or opening a flexible spending account (FSA), which lets you defer money from your paycheck, pre-tax, to use throughout the year to pay medical bills.
- Dental insurance. You may be able to add coverage, drop coverage, or switch from one type of plan to another.
- Vision insurance. This typically helps pay for glasses, contacts and regular eye examinations. As with other types of insurance, you may be able to add or drop coverage.
- Life insurance. If your employer offers this benefit, you can opt in or out at open enrollment; you may also have the option of paying for more coverage.
- Short-term and long-term disability coverage. This insurance pays you all or part of your usual wages if you're unable to work for a period of time because of injury or illness.
When Is Open Enrollment?
Typically, companies have one open enrollment period each year. Rather than making benefit changes whenever anyone wants them throughout the year, it's easier for an employer to make them all at once for everyone.
Companies usually hold open enrollment in the final quarter of the year, so new coverage begins on January 1. Some companies invite representatives of the various companies that provide coverage to present information to employees; others may ask an HR representative to present options; others may simply send an email reminder and make written materials available to employees who ask for them.
You may have only a couple of weeks to decide what coverage you want to get, drop, or change. Ask your human resources department or manager when open enrollment takes place, so you can think about your options ahead of time. Once you make your selections, you won’t get the chance to change them again until the following year’s open enrollment, unless you have a qualifying event.
If you're one of the 11 million Americans who purchase their health insurance through healthcare.gov or a state-run exchange, be sure to sign up or renew your coverage prior to the open enrollment deadlines, which are usually in mid-December.
Qualifying Events That Allow You to Change Insurance Coverage
Once open enrollment closes, you'll have to live with your choices for a year. There are some exceptions, though. If you have a "qualifying event,” you may be able to change your insurance coverage between open enrollment periods. These events generally involve adding or removing a family member. For example, you’ll be able to change your coverage if you:
- get married
- have a baby
- adopt a child
- get divorced, or
- lose a spouse or child to death.
If you experience one of these events, you should contact your human resources office as soon as possible.
When to Contact an Attorney
Your company's human resources department should be able to answer most of your questions regarding open enrollment, but sometimes disputes arise, especially regarding whether a particular life change is a qualifying event. If your employer fails to recognize a qualifying event, or has wrongly denied you coverage for another reason, talk to an lawyer who specializes in employee benefits promptly to protect your rights.