How2Day: The Disadvantages of Open Enrollment

Employers have open enrollment once in a calendar year, typically between October and December. The timing gives benefits specialists time to process changes before they take effect on Jan. 1. During open enrollment, employees can explore options and change selections for benefits such as health care coverage, and supplementary coverage for vision, dental and long-term care. Employees can also adjust the amount of pretax dollars set aside for Flexible Spending Accounts (FSA) and Dependent Care Accounts (DCA). Large organizations and small companies alike experience challenges during this time of year.

It's imperative to communicate the importance of open enrollment season to all employees. Benefits specialists distribute information packets to employees or direct employees to the company's intranet to enroll using human resources information systems' self-service applications. Disadvantages related to communication about open enrollment dates include employees' failure to remember open enrollment dates so they don't miss their opportunity to change selections. If an employer doesn't schedule mandatory informational meetings about open enrollment, employees skip benefits presentations that could help in the decision-making process. Some employees ignore employer communication altogether and miss the opportunity to elect or change benefits coverage.

The Affordable Care Act became effective on Mar. 23, 2010. With legislation containing so many aspects of health care reform, it almost requires all citizens to read the 974-page document just to understand what changes to anticipate in employer-provided coverage. Benefits specialists may cover some of the major points in the law, but employees are personally responsible for selecting health care coverage that's suited to their circumstances. This puts individuals who do not understand the law at a distinct disadvantage in selecting appropriate coverage for themselves and their families. The ACA also affects the open enrollment time -- employers and employees accustomed to open enrollment that lasts from November through the end of December each year may see a shortened period for open enrollment in 2011 and beyond.

Even when employees receive information packets before attending company meetings about open enrollment, they may not have taken the time to review the materials before the meeting. Consequently, the benefits specialists' discussion about coverage options is brand-new information. A disadvantage is that employees don't invest the time in reviewing information prior to open enrollment meetings and therefore won't come prepared with specific questions about their options. Failure to prepare for a group meeting necessitates one-on-one guidance with one of the company's benefits specialists. This is very time consuming and defeats the purpose of scheduling all-staff meetings to explain open enrollment procedures.

Large organizations may outsource open enrollment administrative functions, while smaller companies use existing staff to perform administrative functions. Human resources staff members are sometimes more familiar with employees, their personal circumstances and health care needs. Employees appear to trust the advice and guidance an on-site benefits specialist can provide; however, even a small company that handles its own administrative functions can experience a backlog in processing changes if they are also called upon to provide advice and guidance about selections. The combined processes of providing advice, guidance and efficient handling of administrative functions can also be very costly and time consuming.

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