We’re a little over a month out from Open Enrollment and many small business owners may be wondering how to get or change health insurance plans for employees during this time. Good news! We put together this guide to open enrollment for small businesses to help you understand and efficiently navigate health insurance during this important window of time.
The basics of open enrollment for small businesses
Open enrollment for small businesses happens at the same time every year between November 1 and December 15. During this window, individuals and employees can join new health plans or make changes to their existing coverage for the upcoming year. This gives insurance carriers and businesses the remaining 16 days of the year to file and process the paperwork that can affect changes for the coming year. All plans then go into effect on January 1.
It all sounds simple enough, but it can actually be a confusing time for small business owners, especially if it’s their first time navigating open enrollment with employees.
Existing coverage
If this isn’t your first open enrollment for small businesses, you might know that open enrollment can be a time for your employees to update or change their health insurance coverage. Since the paperwork will need to be processed in a short two-week timeframe after open enrollment, you’ll want to make sure that you and your employees have ample time to get your ducks in a row.
It’s not a bad idea to hand all required paperwork to your employees ahead of schedule so they have time to review and ask questions. You can contact insurance carriers ahead of time and request enrollment forms for the upcoming year as well as notices of any changes to coverage.
A best practice is to have all the necessary paperwork in employee’s hands for at least 1 month prior to the start of enrollment so they can review their options and ask questions. You will probably want to create information packets for your employees that includes a checklist, a copy of notifications about changes to coverage, forms for updating insurance, and a handy checklist so employees can easily navigate the process. You may even want to send weekly reminders via email to keep employees informed about the timelines around open enrollment.
You should distribute all packets to employees around October 1 along with notifications and reminders that they have been sent. Prompt employees to make elections as soon as possible. This should give employees enough time to review all of their choices and begin submitting elections by November 1 when open enrollment officially begins. For those that need a little more time, it can be a good idea to continue to send reminders about the deadline. You may even want to consider having virtual office hours or set aside time for people to meet in case they have questions about coverage options.
By December 15th, your employees should have made their elections so that you can begin submitting paperwork to carriers on December 16th. It’s a good idea to send that paperwork via return receipt or overnight carrier.
New coverage
For small business owners who will be providing healthcare coverage for the first time in 2021, getting started early is key. Start by considering your options for providing healthcare coverage:
- Private insurance carriers
- Professional employer organizations
- Associations
- Government plans for business or individual coverage
Taking a look at your options early on can help you be better prepared when it comes time for open enrollment for small businesses.
Private carriers
Working with insurance carriers directly can be complex. It requires deep research on your part to identify all the varying levels of coverage and price points. If you’re a novice at offering coverage to employees, you may want to work with a licensed insurance broker who can shop for you and make recommendations about the best options.
Professional Employer Organization (PEO)
Small to medium-sized businesses sometimes outsource payroll and benefits access and administration to firms called PEOs. This is one way to lower insurance costs since your employees would be joining a larger pool served by the PEO. PEOs usually charge a percentage of overall payroll to provide these services.
Association Health Plan (AHP)
Another option is to offer insurance through an AHP, which is a group that allows companies to band together (sometimes by industry or geographic area) to create a larger employee pool, similar to PEOs. Industry associations and chambers of commerce sometimes create AHPs to serve their members. This option can be ideal because AHPs can’t increase premiums or deny coverage for pre-existing conditions under federal law and some face additional requirements under individual state law. You’ll need to confirm that coverage is available in your locale.
PEO and AHP options are often leveraged by small businesses that have 5 or fewer employees because it enables them to get coverage options and lower price points that are typically only available to businesses with hundreds of employees.
Government Plans
The Marketplace offers the Small Business Health Options Program (SHOP) for small businesses to purchase group plans and coverage. This option is only available to businesses with no more than 50 employees. With SHOP, employers choose the level of contribution required by employees as well as any waiting times that apply before employee coverage begins.
Decent care is good for business
Small businesses don’t always have the easiest time finding affordable health plans for their employees. Open enrollment for small businesses can get confusing, fast. It’s more important than ever to have health care, yet rising costs make it difficult for small businesses to carry health insurance coverage for their employees. Unlike large employers who can leverage economies of scale to offer customized, affordable healthcare, small businesses have few options.
Decent is changing that. We’re leveraging economies of scale to level the playing field so that small businesses can access the same customized, affordable healthcare options as big businesses. All of Decent’s plans are Affordable Care Act (ACA)-compliant and built around convenient, free primary care and priced at up to 40% less than market rate. Get your free quote today.
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