As open enrollment winds down, some participants may determine that they have elected too much or too little coverage for next year, while others who ignored enrollment may wish they had chosen something. The good news is that options may still exist.
Health Plans
Current enrollees in an existing health plan may find that they were automatically renewed. Even if it’s not the best fit for the employee’s needs next year, it is likely better than having no coverage at all. Unfortunately, employees eligible for first-time enrollment are usually out of luck for employer-sponsored traditional group plans if they do not choose a plan during enrollment.
Benefit Accounts
Some employers offer various benefit account options instead of or to supplement traditional group plans. Remember, some, but not all, are tied to open enrollment. Let’s look at common benefit accounts and when employees can and cannot enroll.
Health Savings Accounts (HSAs)
Health Savings Accounts require owners to enroll in an HSA-eligible high-deductible health plan (HDHP). If that criterion is not met, enrollment is prohibited regardless. Participants may open HSAs at work if offered, but they may also acquire them from various institutions, like some banks. Regardless of where an employee finds one, regulations permit enrollment at any time, during or outside of open enrollment.
Health Reimbursement Arrangements (HRAs)
Health Reimbursement Arrangements come in several different versions. Qualified small employers can offer QSEHRAs, and any employer can offer Individual Coverage HRAs. These two can start anytime outside of open enrollment for eligible employers. When offered outside of open enrollment, a Special Enrollment Period triggers for eligible employees.
Lifestyle Spending Accounts (LSAs)
While they may not cover Section 213(d) medical expenses, LSAs can pay for various health and wellness-related expenses. Here’s an example. A new employee overlooked open enrollment and lacks access to much-needed mental health support. While the LSA may not pay for psychologist sessions, the employee may be able to use LSA funds to cover a spiritual retreat, life coaching, or meditation classes. LSAs are not subject to open enrollment period regulations, meaning they can start anytime during the calendar year.
Flexible Spending Accounts (FSAs)
Flexible Spending Accounts are owned and sponsored by employers and are subject to regulations like open enrollment. Employees who missed the enrollment deadline must wait until the next enrollment period. Participants who wanted to change their contributions but missed the deadline must also wait until the next enrollment period. However, should an enrolled participant experience a qualifying life event, regulations allow for adjusting contributions as appropriate for the life change, such as increasing the annual election after family size has increased through birth or adoption.
What’s the bottom line?
Open enrollment is a critical time of year. Third-party administrators do their best to ensure that all eligible employers can offer attractive benefits and that new employees and participants get the necessary information and reminders. However, life happens, and employers should note that there may still be time to support employees’ health and well-being needs.
While traditional group plans and FSAs are only available during open enrollment, employees may seek out individual coverage on the Healthcare Marketplace or elsewhere and receive employer assistance through QSEHRAs or ICHRAs. Employees with eligible HDHP coverage can be allowed to open an HSA anytime during the plan year. Finally, employers may also offer financial assistance in the form of LSAs at any point during the calendar year.
