I remember the first time I got a “real job” after college and was no longer covered under my parents’ insurance. Within the first couple of days of being on the job, I met with HR to go over insurance so I could make my benefits elections. I vividly remember glossing over foreign terms like “open enrollment” and “cafeteria plan.” And that’s where that memory ends.
While these terms are now part of my regular vocabulary, I know that even seasoned employees can use a refresher on the terms and nuances of open enrollment. Here are some of the most frequently asked questions we get.
What is Open Enrollment?
Open enrollment is when your benefits are renewing for the year and you’re able to make changes to your benefits elections. Some benefit plans may have changes, such as a rate increase, a change in coverage, a new benefit option to choose from, or perhaps your plan is being discontinued. You can also add or remove any dependents from an existing plan.
Open enrollment happens annually and usually occurs within 1-2 months of when the new or recurring plan(s) take effect. Some companies may require you to actively enroll or re-enroll in benefits during open enrollment, whereas others may simply have your benefits roll over from the previous plan year to the most comparable benefit plans. Be sure to find out what the expectation is with your company or you may miss your opportunity to make election changes.
What are month-in-advance premiums?
Let’s say your insurance plan takes effect October 1. In order for that coverage to actually go into effect, the insurance company needs their money to pay for it. If any of the premium is employee-paid, your company will likely start collecting from you in September in order to have full payment to the insurance company by the first of October. This is what they call “month-in-advance” premiums.
What you may not realize is that this method of pre-paying one month in advance continues throughout the duration of your plan. Whatever you pay in March is for April’s coverage; whatever you pay in July is for August. And if you quit August 3, your coverage *should be good through the end of the month since you already pre-paid for it in July.
*Some companies front the bill and collect in real-time rather than one month in advance, so it’s possible you may not have coverage through the end of the month.
I just started my insurance plan and it looks like I’m having more money deducted from my paycheck than I should. Why?
If your insurance plan started October 1 and your company did not collect premium payments from you in September, perhaps because your enrollment form was received late or you were newly hired and your coverage started immediately, then you will likely have increased deductions until you’re caught up with month-in-advance payments. Once your month-in-advance payments have been collected, you should expect to see normal deductions from your paycheck.
Can I make plan changes outside of open enrollment?
Yes! If you meet qualifications. When certain life events happen mid-year, such as a birth, adoption, marriage, loss of coverage, divorce, etc., you have a special 30- or 60-day window (depending on your plan) to make changes. If you miss this window, you’ll need to wait for the annual open enrollment to make benefit plan changes.
When you hear about open enrollment coming, be sure you take some time to review the benefit plan changes and thoughtfully consider your options. If you have more questions about open enrollment or benefits in general, please contact our experts at email@example.com.