4 Lessons Learned from Open Enrollment During the Pandemic

There’s no denying that the 2020 open enrollment season was unprecedented. It’s challenging enough most years to engage and educate employees to actively make decisions about their health care and other employer-sponsored benefits, and the prevalence of remote and hybrid workplaces added another level of complexity to the enrollment season.

The pandemic encouraged employers to reimagine their open enrollment processes and try different tactics. This article discusses key findings and lessons from last year’s open enrollment and how employers can best prepare for the 2021 season.

1. Employees Want—and Need—Holistic Benefits

As the name suggests, employee benefits should be designed to provide holistic support for employees. But, as was revealed as the pandemic evolved, the perks many employees want may not typically be available. These may include benefits or arrangements that began out of necessity due to the pandemic, such as telecommuting. Now, many employees expect at least some of these benefits to become permanent.

Employees may especially be expecting new benefits if very little changed in the past year. According to a survey from WEX, 85% of employers said they didn’t change their 2021 offerings due to the pandemic. It appears many employers kept their benefits packages during an uncertain year.

If employers are ready to revamp their benefits, what do employees want? The following are some of the top benefits employees are looking for right now:

·         Telecommuting

·         Flexible or hybrid scheduling

·         Greater compensation

·         Mental health resources

·         Caregiving benefits

·         Developmental opportunities

If unsure, employers should consider surveying employees or encouraging managers to discuss open enrollment during one-on-one meetings to better understand how employees are doing and which benefits they find most valuable. The overall goal is to establish meaningful offerings and resources for current and prospective employees.

2. More Time Is Needed to Thoughtfully Plan and Promote Open Enrollment

The most successful open enrollment campaigns start engaging employees months before enrollment opens. That means organizations need to start reviewing their offerings sooner rather than later so there’s ample time to develop and execute a successful open enrollment strategy or campaign. During the pandemic, employees leaned heavily on employer-sponsored mental health resources, employee assistance programs and other virtual resources. Benefits mattered even more to employees, and that provides an opportunity for employers this year to start showcasing all the available perks for employees as soon as possible to thoughtfully engage and retain employees.

Another reason employers have such a great opportunity is because of the massive wave of turnover expected by the end of 2021. Employers should prepare to get ahead of turnover by previewing new or enhanced benefits with employees. The pandemic allowed many people to rethink their values and make major life changes—possibly including finding new jobs. Many employees are staying in their current roles to collect a steady paycheck and keep household finances stable. That is, until the pandemic is over. Workplace stressors—worsened by the pandemic—are likely to blame. Additionally, compensation, benefits and work-life balance are top reasons why employees are job hunting this year, so it’s critical for employers to offer competitive benefits.

Don’t worry about communicating too soon about enrollment. Research shows that repetitive messaging and reminders increase the odds of an employee seeing enrollment information and understanding the upcoming benefit changes and how they work.

Open enrollment this year provides a fantastic opportunity for organizations to combat turnover by proving they have gone above and beyond to support employees with top-tier benefits offerings. Especially this year, the earlier employers can start their open enrollment processes, the better the participation and employee retention potential will be.

3. Virtual Open Enrollment Tactics Are Effective, Regardless if Employees Are On-site or Remote

The pandemic undeniably shifted open enrollment efforts to go digital. Consider the following WEX survey results:

·         For 2020 enrollment, 67% of employers delivered open enrollment education differently due to the pandemic. Tactics included virtual open enrollment fairs, live webinars and online chats during scheduled times to help address employee questions.

·         Of those employers that added virtual engagement methods to their open enrollment strategy, 85% said they will continue to do so in the future.

Virtual open enrollment fairs successfully educated and engaged employees, both remote and on-site. Employees have embraced many activities and processes as they’ve gone virtual or digital, so it’s not necessarily a surprise that employees generally accepted virtual enrollment.

That’s good news for organizations that offered virtual open enrollment opportunities, as they can optimize and improve for this coming season. To determine employees’ appetite for information and enrollment details, employers might consider surveying employees now for feedback on virtual enrollment components. Survey results can drive not just enrollment communications but also any ongoing benefits education throughout the year. This is the year to show up for employees year-round to keep them engaged and supported in the workplace, potentially increasing employee satisfaction and retention. Organizations operating in a hybrid workplace model may also yield great results by offering both in-person and virtual open enrollment events.

If employers don’t have an existing benefits website available, they could consider building an internal digital destination so employees have a year-round resource. HR departments can post evergreen partner resources and continue to share any other relevant benefits updates.

Furthermore, if employers have yet to switch to virtual open enrollment but plan to, it’s important to allow extra time to properly implement new technology or platforms in advance of open enrollment. Focusing on employee experience can help keep employees engaged in the enrollment process and keep morale high. Benefits administration technology can help streamline decision-making and other processes, explain benefits and thoughtfully guide employees as they make the best choices for them and their dependents.

4. Open Enrollment Needs to Be More Personalized and Interactive

Now, more than ever, employees want to know that their employers care about them and open enrollment isn’t just a transaction. Everyone has unique personal needs and their own physical, mental or financial challenges brought on by or amplified by the pandemic. It’s also important for employers or benefits providers to make themselves available to quickly address any individual employee questions and help guide them through the process or available options. This personalized touch can help increase benefits utilization.

Gamification is also proving popular as a way to personalize open enrollment. For example, employees may be interested in a benefits calculator to help decide which plan is best for them. Employees are ready for personalized help from tools or people to help guide them through the process and select the right benefits after a tough year.

Conclusion

Although the 2020 open enrollment season presented considerable challenges, it also provided valuable lessons on better engaging and supporting employees. Now’s the time for employers to review these general trends and lessons along with the specific needs and wants of their current and prospective workforce. Start now to thoughtfully plan and communicate 2021 open enrollment to increase plan participation and help combat potential turnover on the horizon.

Reach out to Better Business Planning, Inc. for additional open enrollment support, including enrollment guides, employee communication resources and more.

Benefits Buzz Newsletter - August 2021

Additional FAQs on the ARPA COBRA Subsidy

On July 26, 2021, the IRS issued Notice 2021-46, providing additional guidance on the application of the American Rescue Plan Act (ARPA) subsidy for continuation health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) in the form of 11 questions and answers.

The Notice expands on prior guidance issued on May 18, 2021.

Background

The ARPA subsidy covers 100% of COBRA and state mini-COBRA premiums from April 1–Sept. 30, 2021, for certain assistance-eligible individuals whose work hours were reduced or whose employment was involuntarily terminated. The subsidy is funded via a tax credit provided to employers, insurers or group health plans, according to the terms of the statute.

Q&A Topics

The questions addressed include:

·   Subsidy availability to individuals eligible for an extension who had not elected it;

·   Whether subsidies for vision or dental-only coverage ends due to eligibility for other coverage that does not include vision or dental benefits;

·   Subsidy availability under a state statute that limits continuation coverage to government employees;

·   Whether employers may claim the tax credit if the Small Business Health Options Program (SHOP) Exchange requires employers to pay COBRA premiums; and

·   Which party may claim the tax credit in situations involving parties other than an insurer or former common law employer providing the COBRA coverage.

Proposed Rule Would Update Benefit and Payment Parameters for 2022

On July 1, 2021, the Department of Health and Human Services (HHS) published a proposed rule that would revise several benefit and payment parameters under the ACA for the 2022 benefit year. While many of the proposed changes primarily impact insurers and Exchanges, some provisions may affect employers.

·   

The rule proposes to repeal the Exchange direct enrollment option, which establishes a process for Exchanges to work directly with issuers, agents and brokers to operate enrollment websites through which consumers can apply for coverage, receive an eligibility determination and purchase a qualified health plan.

·   For the 2022 coverage year and beyond, the rule proposes to lengthen the annual open enrollment period for coverage through all Exchanges to Nov. 1 through Jan. 15. The current annual open enrollment period runs Nov. 1 through Dec. 15.

·   The rule proposes modifications to the Section 1332 State Innovation Waiver process, including changes to many of the policies and interpretations of the guardrails recently issued in the 2022 Notice of Benefit and Payment Parameters, which provided more flexibility for states to apply for waivers from certain ACA provisions.

CDC Urges Schools to Fully Reopen in the Fall, Releases New Guidance

On July 9, 2021, the Centers for Disease Control and Prevention (CDC) released new guidance for K-12 schools, urging them to fully reopen in the fall.

The CDC acknowledged that “students benefit from in-person learning,” even as the delta variant of COVID-19 spreads across the United States.

The agency encouraged school districts to use local health data to help make determinations about the level of COVID-19 prevention measures to use. For instance, areas with high vaccination rates may not need to require temperature screenings to enter a building.

Generally, the CDC’s new guidance recommends social distancing and mask-wearing among the unvaccinated in schools (which effectively means many K-12 students, as no vaccine has been authorized for use for ages younger than 12).

Since many students are ineligible for a vaccine, the CDC encourages “layered prevention strategies” (e.g., using multiple prevention strategies together consistently, such as social distancing and screening tests) to help protect everyone, including unvaccinated teachers.

However, the agency noted that some prevention measures, such as social distancing, may prevent schools from fully reopening. In those situations, the CDC said, layering additional protections is even more critical.

The message is clear from the CDC: Schools should reopen in the fall, take necessary precautions and inform decisions with local health data.

What’s Next?

This new guidance from the CDC is likely to be welcomed news among working parents, many of whom have been forced to work at home alongside their children. With reopened schools, parents won’t need to divide their focus between their jobs and caregiving responsibilities.

From an employer perspective, this new guidance means working parents may no longer need to stay home to watch children. Therefore, businesses may be able to reopen more swiftly in the fall—opposed to having staff trickle back in.

Additionally, employers should consider how this new guidance may affect the benefits they provide to working parents.

8 Policies to Review Before Returning to Work

Returning to in-person work is a top priority for many workplaces. As the impact of the COVID-19 pandemic lessens, employers are eager to get employees back in their buildings. But that comes with a series of complications.

The most significant complication is the fact that every workplace decision in the immediate future will be viewed through COVID-19-colored glasses. In other words, while the pandemic may be getting under control, it’s still top of mind for many people. Knowing this, employers will need to balance policies against health concerns. This means potentially updating preexisting policies or adding new ones to conform to the current reality where employees are still dealing with the lingering effects of the COVID-19 pandemic (e.g., greater dependent responsibilities, health conditions, financial disruptions, etc.).

To assist this effort, this article outlines eight workplace policies that employers may consider revisiting prior to reopening their businesses for in-person work. Reevaluating policies now can help better transition employees back into the workplace later.

Note, this is a general information article. The law is constantly evolving, and government guidance will continue to affect all these policies moving forward. Employers should contact legal counsel when amending or drafting any workplace policy.

1. Return-to-Work Policy

Some workplaces have stand-alone return-to-work policies that apply to employees temporarily unable to do their jobs due to injury or illness. These policies typically outline how an employee may still contribute to the organization while ill or injured. In other cases, return-to-work policies refer to the specifics of transitioning employees back to their regular positions or alternative arrangements. In the wake of the COVID-19 pandemic, employers may consider revising return-to-work policies to include individuals who are unwilling or unable to return to in-person work due to COVID-19 fears.

2. Travel Policy

Some workplaces require travel for certain positions. During a pandemic, this can make travelers wary. That’s why some employers have adapted their travel policies to limit nonessential travel and specifying precautions that employees should observe while traveling. These policies often include COVID-19 tests, self-quarantining or other measures to ensure the safety of traveling employees.

3. Remote Work Policy

Remote work policies may have been a fringe consideration just a few years ago, but now they’re nearly everywhere. And, during the COVID-19 pandemic, they have been invaluable. That’s why employees and employers alike are looking for ways to retain these arrangements. To that end, employers may want to explore how they can adapt their current remote work policies to accommodate employees even after the COVID-19 pandemic ends. Remote work policies typically specify how employees may request remote arrangements and outline the steps in the approval process. Policies may also be adapted to cover hybrid work situations, where employees work some in-person hours and some remote-working hours. Employers interested in such arrangements may consider ways to balance scheduling flexibility with adequate staffing coverage.

4. Paid Time Off Policy

Paid time off (PTO) is one of the most popular employee benefits offerings. Sometimes employees need to take time away from work for personal obligations or to simply recharge. PTO is sometimes separate from vacation time, with different restrictions as to when it may be used. For that reason, employers may choose to adapt their PTO policies to reflect the realities of the COVID-19 pandemic; this may include expanding applicable reasons to request PTO, changing how PTO is accrued or adjusting how much PTO may be used within a certain period. 

5. Vacation Policy

After a year of being cooped up at home, employees may be yearning for vacations. However, if everyone decides to take off at once, that could be crippling to a business. For that reason, employers may wish to review their vacation policies (if separate from PTO policies) to ensure adequate operational coverage at all times.

6. Sick Leave Policy

As with vacation time and PTO, sick leave is another way for employees to take time away from work if they need it. However, this type of leave is subject to specific state and federal employment laws. For instance, during the COVID-19 pandemic, some employees were afforded guaranteed time away from work under specific circumstances. That’s why it’s important for employers to review their sick leave policies to ensure compliance with applicable federal and state laws; this includes continuing to monitor official guidance as it’s released.

7. Mask Policy

Mask-wearing has been a contentious topic during the COVID-19 pandemic. With more employees getting vaccinated, some businesses aren’t requiring that masks be worn by anyone—staff or customers. Other establishments are taking the opposite approach, even among vaccinated individuals. Deciding whether to require masks will come down to individual workplaces, but each decision will likely involve the following considerations:

·         Applicable state or federal laws

·         Federal/expert recommendations (nonbinding)

·         Employee attitudes

·         Density of COVID-19 cases in the area

·         Operational variables surrounding the organization

Additionally, employers with mask policies will need to consider to whom the policies apply (e.g., all staff and customers) and in which circumstances (e.g., when within 6 feet of another person).

8. Workplace COVID-19 Safeguards Policy

During the height of the COVID-19 pandemic, many workplaces adopted policies specifically aimed at reducing the spread of COVID-19. These included enforcing social distancing requirements, spacing out workstations, cleaning shared areas frequently and limiting building capacities. Even as the pandemic winds down, some employers may wish to continue these policies to provide enhanced safety and peace of mind to employees. In addition, some workplaces are introducing COVID-19 vaccination policies.

Conclusion

Each workplace is unique and its policies should reflect that uniqueness. When it comes to return to work, employers will need to think about how to adjust protocols to best fit their own situations. This doesn’t mean redrafting everything from scratch. Rather, employers should consider the current state of affairs (i.e., the COVID-19 factor) and adapt their policies accordingly.

Reach out to Better Business Planning, Inc. for additional workplace guidance. 

OSHA Updates Guidance for Mitigating and Preventing the Spread of COVID-19 in the Workplace

On June 10, 2021, the Occupational Safety and Health Administration (OSHA) updated its guidance on mitigating and preventing the spread of COVID-19 in the workplace. The guidance now focuses on protections for unvaccinated and otherwise at-risk employees. OSHA’s update to the guidance reflects the U.S. Centers for Disease Control and Prevention (CDC) guidance for fully vaccinated people. This guidance emphasizes industries noted for prolonged close-contacts like meat processing, manufacturing, seafood, grocery and high-volume retail.

The original guidance issued on Jan. 29, 2021, provided requirements employers should take to implement a workplace COVID-19 prevention program and did not include information about the COVID-19 vaccine.

Updated Guidance

OSHA provides that most employers no longer need to take steps to protect their workers from COVID-19 exposure in any workplace—or well-defined portions of a workplace—where all employees are fully vaccinated. The new guidance updates the roles of employers and workers in responding to COVID-19 for those that are at-risk or unvaccinated.

The guidance also provides an appendix with measures for high-risk workplaces with mixed-vaccination status workers. It provides that employers take additional steps for high-risk situations due to the following factors: close contact, duration of contact, type of contact and other distinctive factors.

Employer Next Steps

Employers should continue to take steps to protect at-risk or unvaccinated workers in their workplace. Employers can do this by implementing multilayered interventions to protect these workers and mitigate the spread of COVID-19.

To view the original article, go to http://www.bbp-dac.com/bbp/OSHAUpdatesGuidanceforMitigatingandPreventingtheSpreadofCOVID19intheWorkplace.pdf 

Benefits Buzz Newsletter - June 2021

HSA/HDHP Limits Increase for 2022

On May 10, 2021, the IRS released Revenue Procedure 2021-25 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2022. The IRS is required to publish these limits by June 1 of each year.

Eligible individuals with self-only HDHP coverage will be able to contribute $3,650 to their HSAs for 2022, up from $3,600 for 2021. Eligible individuals with family HDHP coverage will be able to contribute $7,300 to their HSAs for 2022, up from $7,200 for 2021. Individuals who are age 55 or older are permitted to make an additional $1,000 “catch-up” contribution to their HSAs.

The minimum deductible amount for HDHPs remains the same for 2022 plan years ($1,400 for self-only coverage and $2,800 for family coverage). However, the HDHP maximum out-of-pocket expense limit increases to $7,050 for self-only coverage and $14,100 for family coverage.

IRS Issues Guidance on Taxability of DCAP Benefits

On May 10, 2021, the IRS released guidance on the taxability of dependent care assistance programs (DCAPs) for 2021 and 2022, clarifying that amounts attributable to previously issued carryover and extended grace period relief generally are not taxable.

Carryovers of unused DCAP amounts typically are not permitted, although a 2½ month grace period is allowed. However, recent coronavirus-related relief allows employers to amend their plans to permit the carryover of unused DCAP amounts to

Specifically, if these dependent care benefits would have been excluded from income if used during taxable year 2020 (or 2021, if applicable), these benefits will remain excludible from gross income and are not considered wages of the employee for 2021 and 2022. They will also generally not be taken into account for purposes of applying the exclusion limits of Internal Revenue Code Section 129.
plan years ending in 2021 and 2022, or to extend the permissible grace period to plan years over the same period.

Remainder of 2022 Payment Notice Finalized

On May 5, 2021, the Department of Health and Human Services (HHS) published a second Notice of Benefit and Payment Parameters (NBPP) for 2022 that finalized the remainder of the standards included in the proposed notice issued at the end of 2020. The first final 2022 NBPP was published Jan. 19, 2021.

This second NBPP describes additional benefit and payment parameters under the Affordable Care Act (ACA) that apply for the 2022 benefit year, including the following:

·   The annual out-of-pocket maximum limit will increase to $8,700 (self-only coverage) or $17,400 (family coverage).

·   The required contribution percentage for catastrophic coverage eligibility will decrease to 8.09%.

·   An additional special enrollment period (SEP) for Exchange coverage for certain Exchange enrollees who lose premium tax credit eligibility.

IRS Releases HSA Limits for 2022

IRS has just issued Revenue Procedure 2021-25, which provides the 2022 cost-of-living contribution and coverage adjustments for HSAs, as required under Code Section 223(g). It also includes the 2022 limit for Excepted Benefit HRAs. Some items have increased for 2022.  

 

Annual HSA Contribution Amounts

 

2021   2022    Contribution Amounts

 

$3,600  $3,650  Individual 

 

$7,200  $7,300  Family

 

$1,000   $1,000  Catch-up 

 

Annual Maximum Out-Of-Pocket Limits for HDHP

  

2021  2022  Coverage Levels

 

$7,000  $7,050 Individual

 

$14,000 $14,100 Family 

 

Annual Minimum Deductible Amount Limits for HDHP

  

2021 2022  Coverage Levels

 

$1,400 $1,400 Individual

  

$2,800  $2,800 Family

 

Excepted Benefit HRA

 

2021 2022 Contribution Limits

 

$1,800 $1,800

 

For a copy of Revenue Procedure 2021-25 see below: 

Rev. Proc. 2021-25

SECTION 1. PURPOSE

This revenue procedure provides the 2022 inflation adjusted amounts for Health 

Savings Accounts (HSAs) as determined under § 223 of the Internal Revenue Code and the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under § 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations. 

SECTION 2. 2022 INFLATION ADJUSTED ITEMS

01 HSA INFLATION ADJUSTED ITEMS

Annual contribution limitation. For calendar year 2022, the annual limitation on 

deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,650. For calendar year 2022, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,300.

High deductible health plan. For calendar year 2022, a “high deductible health 2

plan” is defined under § 223(c)(2)(A) 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 the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,050 for self-only coverage or $14,100 for family coverage.

02 HRA INFLATION ADJUSTED ITEM

For plan years beginning in 2022, the maximum amount that may be made newly 

available for the plan year for an excepted benefit HRA under § 54.9831-1(c)(3)(viii) is $1,800. See § 54.9831-1(c)(3)(viii)(B)(1) for further explanation of this calculation.

SECTION 3. EFFECTIVE DATE

This revenue procedure is effective for HSAs for calendar year 2022 and for 

excepted benefits HRAs for plan years beginning in 2022. 

SECTION 4. DRAFTING INFORMATION

The principal author of this revenue procedure is Bill Ruane of the Office of 

Associate Chief Counsel (Income Tax & Accounting). For further information regarding § 223 of the Code and HSAs contact William Fischer at (202) 317-5500 (not a toll-free number). For further information regarding excepted benefit HRAs, contact Christopher Dellana at (202) 317-5500 (not a toll-free number). For further information regarding the calculation of the inflation adjustments in this revenue procedure, contact Mr. Ruane at (202) 317-4718 (not a toll-free number).

A Note From Larry Grudzien:

I have updated my Employer's Guide to Health Savings Accounts (HSAs) to include the new 2022 contribution and coverage amounts. I have also made other other changes.

Since I first wrote this publication in 2004, I have been updating it every time there has been any changes. It explains every aspect of HSAs in fifty questions and answers. It also includes a chart that compares HSAs with Health FSAs and HRAs.

If you would like a copy, please click on the link below:

http://www.bbp-dac.com/bbp/HSAEmployerGuide2021Final.pdf