Employers that sponsor group health plans have some different options available to them for designing their plans’ enrollment process. When it comes to enrollment, health plan sponsors should have rules in place regarding:
When employees can enroll in the health plan;
When employees’ elections for group health plan coverage take effect; and
What method is used for making elections.
Highlights
ENROLLMENT PERIODS
Employer-sponsored group health plans typically have three enrollment periods:
· An initial enrollment period when an employee is first eligible
· An open enrollment period that occurs before the start of each plan year
· Midyear enrollment periods that are triggered by specific events
COMMON ELECTION METHODS
· Affirmative elections
· Default (or automatic) elections
Rolling (or evergreen) elections
There are some federal laws that impact how employers can design the enrollment process. For example, the Affordable Care Act (ACA) limits waiting periods for initial enrollment and requires applicable large employers (ALEs) to provide an annual opportunity for full-time employees to elect coverage. Also, the rules for Section 125 plans (or cafeteria plans) limit when employees can make changes to their pre-tax elections during a plan year
Links And Resources
Final regulations on the ACA’s employer shared responsibility rules
Proposed regulations for Section 125 plans (taxpayers may rely on these regulations until final regulations are issued)
Final regulations regarding the ACA’s 90-day waiting period limit
Final regulations on midyear election change events for Section 125 plans.
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