Employee Benefits Open Enrollment Guide for 2024

In today's competitive labor market, you can’t afford to swing and miss when it comes to what employees look for most: comprehensive benefits packages. Six in 10 employees want benefits packages that offer support for every aspect of their lives. Your offerings can be a powerful force for attracting and retaining employees.

Open enrollment is a chance for your organization to demonstrate its commitment to employee well-being and offer valuable benefits that can make a real difference in their lives. Here are the essential steps and considerations to ensure a smooth and successful open enrollment period.

What Is Open Enrollment? 

Open enrollment for benefits is a designated period during which employees can review, select, and make changes to their employer-provided benefits for the upcoming year. These benefits typically include health insurance, dental insurance, vision insurance, life insurance, retirement plans (like 401(k) plans), and various other perks, like flexible spending accounts (FSAs) and wellness programs.

During the open enrollment period, employees can:

• Enroll: Employees who are eligible but not yet enrolled in specific benefit programs can choose to sign up for coverage.
• Make Changes: Those who are already enrolled can make changes to their existing benefits. This might involve switching between different healthcare plans, adjusting coverage levels, or updating the dependents on their plans.
• Opt Out: Employees can also choose to opt out of certain benefits if they have alternative coverage, like being covered under a spouse's insurance plan.
• Review and Confirm: Even if employees don't expect to make any changes, they should review their current benefit elections to make sure those enrollments align with their current needs and circumstances.

Employers typically hold open enrollment once a year. During this period, HR departments and benefits administrators communicate with employees, providing information about the available benefits, any changes in plan options or costs, and instructions on how to make selections or changes.

Learn More: The 14 Best Employee Benefits to Dazzle Your Talent

When Is Open Enrollment?

Open enrollment periods vary from one employer to another, and they often depend on the organization's specific plans and policies. However, there are some common practices and characteristics:

• Annual Open Enrollment: Many employers conduct open enrollment on an annual basis. This allows employees to make changes to their benefit elections for the upcoming calendar year.
• New Hire Enrollment: Newly hired employees often have a period shortly after their start date to enroll in benefits. This is often called "new hire enrollment" and may occur at any time of the year, depending on the employer's policies.
• Qualifying Life Events: Outside the annual open enrollment period, employees may have the chance to change their benefits if they experience a qualifying life event, including marriage, divorce, the birth or adoption of a child, or a change in a spouse's employment status. The timeframe for making changes in these cases is usually short, often within 30 days of the event.
• Special Enrollment Periods: In some cases, there may be special enrollment periods related to specific circumstances, such as the loss of other coverage (e.g., if a spouse loses their job-based insurance).

Because open enrollment periods can vary between organizations, employees should check with their HR department or refer to their employee handbook for precise information on when their open enrollment period occurs.

Employers should provide detailed information about the specific dates, how to make changes, and any updates to benefit offerings.

How Long Is Open Enrollment?

The duration of open enrollment similarly varies from one employer to another, but it typically lasts for several weeks. A common timeframe is around two to three weeks, but some employers may extend it to a month or longer. The specific duration is determined by the employer's policies and the complexity of their benefits enrollment process.

What Is the Benefits Open Enrollment Process? 

The benefits open enrollment process is a structured series of steps employees follow to review, select, and update their employer-provided benefits. Common steps typically include:

1. Announcement and Communication: HR or benefits administrators communicate the upcoming open enrollment period to all eligible employees. Employees receive information about the dates, deadlines, and any changes to the benefits offerings for the upcoming year.
2. Review Benefits Information: Employees carefully review the information provided, including benefit plan summaries, premium costs, coverage options, and any changes to benefits from the previous year. They should consider their personal and family needs, health, and financial situations when assessing which benefits to choose.
3. Access Enrollment Tools: Employers provide enrollment tools, like employee self-service, to facilitate the selection process.
4. Make Benefit Elections: Employees can choose benefit elections for themselves and their eligible dependents, including health insurance plans, dental and vision coverage, life insurance, retirement plan contributions, and other optional benefits like FSAs or Health Savings Accounts (HSAs).
5. Verify and Confirm Elections: It's essential for employees to review their selections carefully before confirming them. Elections are typically binding for the upcoming year, so employees should double-check their choices align with their needs and preferences. When confirmed, employees need to submit their elections before the deadline as late submissions may result in a loss of coverage or benefits.
6. Submit Required Documentation: Some benefits, like life insurance or dependent care FSAs, may require additional documentation or evidence of eligibility. Employees must submit any necessary paperwork within the specified timeframe.
7. Receive Confirmation: After the open enrollment period ends, employees typically receive confirmation of their benefit elections, outlining the coverage they've selected for the upcoming year.

Open Enrollment Tips and Best Practices for Employers

Open enrollment is a critical time for employees to make important decisions about their benefits. Here are some open enrollment tips and best practices to help your employees navigate the process effectively:

Tip #1: Communicate Early, Often, and Clearly

Benefit needs can be complex, so your staff should have ample time to plan and decide which offerings they’d like to enroll in. It’s your job to provide all the pertinent information (ideally well ahead of time) so employees can make informed decisions and ask questions if needed.

Plan to send out an announcement at least a month before the start of the open enrollment period. Make sure it includes the essentials, like open enrollment dates, the election process, and the specifics about each benefit plan. It’s also helpful to mention the consequences of missing open enrollment to encourage participation.

Don’t be afraid of overcommunicating. Benefits are important, and you don’t want employees to miss out because they weren’t aware or forgot. You can send out another announcement before the start, and again once enrollment is officially underway. It also doesn’t hurt to send out a reminder or two throughout the open enrollment period, especially as the deadline draws near.

You can send out communications via email, but they might go unnoticed in a cluttered inbox. And some employees may not check (or even have access to) a work email account. Consider a social collaboration hub, like Paylocity’s Community, that allows for easy company-wide communication that’s available across multiple devices.

Community also includes “Ask an Expert” groups, where you can direct benefits-related questions. These groups make it simple for you to answer any questions that come up, and over time become a helpful FAQ resource for your workforce.

Tip #2: Stay on Top of Compliance

There are a host of federal and state laws that govern employer-offered benefits and health coverage, like Consolidated Omnibus Budget Reconciliation Act (COBRA), the Affordable Care Act (ACA), and Health Insurance Portability and Accountability Act (HIPAA) to name a few. HR pros are responsible for keeping up to date on the latest regulations and how that may affect employee benefit eligibility.

You can manually keep track of any policy changes and adjust your benefit enrollment process accordingly, but it’s easier (and less stressful) to use HR software that’s equipped with a compliance dashboard. The compliance dashboard can keep track of the latest rates and regulations to flag any potential issues with your open enrollment and benefit election process.

Tip #3: Educate Employees About Benefits

FSA, HSA, PPO, HMO, LTD... there are a slew of acronyms and jargon within the world of benefit offerings — it can be a little intimidating!

Make sure you educate your employees not only about which benefits are offered, but what they entail. When employees have a strong grasp on their benefit selections, they can make a more informed decision. You’ll likely see increased participation, too.

Give your employees a variety of ways to learn about their benefits and how to enroll. On-demand learning modules are an effective method for getting employees involved, and a learning management system (LMS) allows you to customize, assign, and track progress. Even better: employees can access them from anywhere and on their own time.

Make education a part of the process, too. The best benefits enrollment software will also allow you to embed video explainers right into the benefits election self-service portal. Your employees will have easy access to critical benefits information right when they need it.

Frequently Asked Questions About Open Enrollment

Is Open Enrollment the Same for All Companies? 

No, open enrollment isn't the same for all companies. While the fundamental concept of open enrollment is often the same, the specific details, timing, and processes can vary significantly from one company to another.

How Long Do New Hires Have to Enroll in Benefits? 

The timeframe for new hires to enroll in benefits can vary from one company to another and may depend on the employer's specific policies. Some common practices and guidelines include:

• 30-Day Rule: New hires typically have 30 days from their date of hire to enroll in benefits. This window provides employees with a relatively short, but defined, period to make their elections.
• First of the Month Following Hire: In some cases, especially for larger organizations, new hires may have their benefits coverage start on the first of the month following their date of hire. For example, if they're hired on September 15, their benefits coverage might begin on October 1.
• Immediate Enrollment: Some employers allow new hires to enroll immediately on their first day. This means they can make benefit elections on their first day of work or shortly after.
• Waiting Periods: Certain employers have waiting periods before new hires become eligible for benefits. For example, a company might have a 90-day waiting period during which new employees can't enroll in benefits.

Is Open Enrollment Required by Law? 

Open enrollment isn't specifically mandated by federal law in the United States, but certain aspects of benefits enrollment and employee rights are governed by federal regulations:

• Health Insurance Marketplace Open Enrollment: The Affordable Care Act (ACA) requires the Health Insurance Marketplace to have an annual open enrollment period during which individuals can enroll in or make changes to their health insurance plans. This open enrollment period typically occurs in the fall and allows individuals to obtain coverage or switch plans if they wish to do so.
• Employer-Sponsored Benefits: While federal law doesn't require employers to offer benefits or have open enrollment periods, it does regulate aspects of employer-sponsored benefits. For example, employers that provide health insurance must offer eligible employees the opportunity to enroll in health coverage upon becoming eligible for the plan (e.g., new hires or employees who have met the plan's waiting period).
• COBRA Continuation Coverage: The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides certain former employees and their dependents the right to continue their employer-sponsored health coverage for a limited time after losing their job or experiencing other qualifying events. COBRA beneficiaries have specific enrollment rights, but these aren't the same as traditional open enrollment.
• HIPAA Portability and Nondiscrimination Requirements: Federal regulations provide for special enrollment rights outside the typical open enrollment period, namely for loss of coverage events and qualifying life events. Additionally, employers must comply with non-discrimination rules that ensure benefits are provided in a non-discriminatory manner, often based on factors like age or income.

Individual states may have their own regulations regarding benefits enrollment as well, including open enrollment requirements. Employers are responsible for knowing and complying with these state-level regulations in addition to federal laws.

Modernize Your Benefits Administration Experience

Understanding how you can meet the needs of today’s workforce and help your employees get the most out of your benefits package is key to retaining employees and attracting new talent in the coming year.

With benefits administration software, you can streamline open enrollment for you and your employees — even while on the go. From mobile access to event notifications, reminders, and more, enrollment and day-to-day administration will be faster, smoother, and give you the confidence you’re covered.

 Request a demo today to learn more about Paylocity’s benefits administration services.