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Open Enrollment Looms: Time for a Plethora of Required Annual Employee Notifications

September 29, 2021 (5 min read)

Open enrollment is a time each year when, outside of special enrollments like marriage or the birth of a child, individuals can enroll in or change their employer-based health insurance and other welfare benefit plan options. It’s a time when employers unveil new health care premiums/cost sharing and new or revised benefit plans, and allow employees to choose and change benefits and coverage options, usually both for themselves and their covered family members. While open enrollments were fairly common prior to the Affordable Care Act (ACA), the ACA requires “applicable large employers” (generally, employers of 50 or more full-time employees and equivalents) to provide an annual enrollment, and can be subject to penalties for not offering it (at least for employees). It’s also a good time to deliver annual notifications. The resources below describe those requirements and offer additional open enrollment ideas.

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Related Content

  • Open Enrollment Notices Checklist
    Take a look at this checklist, which identifies participant and beneficiary disclosures required by  ERISA, the Internal Revenue Code, HIPAA, ACA, and other laws requiring health and welfare plans to be provided annually where compliance is satisfied by providing employee disclosures at initial plan eligibility and with the employer’s annual open enrollment materials.
  • Cafeteria Plan Design and Compliance (IRC §125)
    Refresh your recollection about using a cafeteria plan to allow employees to make certain of their benefit contributions on a pre-tax basis, knowing that open enrollment is the right time to elect coverage changes for the upcoming plan year. Otherwise, changes can be made only as   permitted by the plan, under the cafeteria plan rules, or at HIPAA special enrollments. This year’s open enrollment materials for the Health Care and Dependent Care Flexible Spending Accounts (DCFSAs), if applicable, should remind participants of any extended carryover or grace period implemented under the plan that participants should take into account when determining 2022 contributions, and that the 2022 limit under the DCFSA reverts back to $5,000 (from $10,500 permitted in 2021).
  • Summary of Material Modification (Employee Benefit Plan)
    Direct plan sponsors to take advantage of open enrollment to satisfy the notice requirement that may apply if they materially modify their group health plan effective in the upcoming plan year (satisfying the 60-day advance notice required under 45 C.F.R. § 147.200(b)).
  • Health Savings Account Design and Compliance
    Remember that the final maximum annual limitation on cost sharing for 2022 is $8,700 for self-only coverage and $17,400 for other-than-self-only coverage for high-deductible plans. CMS Fact Sheet. Plus, under IRS Rev. Proc. 2021-25, for calendar year 2022: (i) the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan (HDHP) is $3,650; (ii) the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $7,300; (iii) a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage; and (iv) annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) cannot exceed $7,050 for self-only coverage or $14,100 for family coverage. For plan years beginning in 2022, the maximum amount that may be made newly available for the plan year for an excepted benefit HRA is $1,800.
  • True-Up Clause for 401(k) Plan (Matching Contribution) (Summary Plan Description)
    Think about including  and communicating a 401(k) plan true-up feature before year-end. This feature gives employees a leg-up on improving their retirement savings where they failed to maximize their matching–eligible contributions during the plan year. .

 

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