Enrolling Employees, Changing Coverage

April 13, 2006

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Once an employee meets your eligibility requirements, you can provide either that the individual is enrolled automatically (by you) or that the individual has to take steps to enroll. If your enrollment process is not automatic, you should do the following:

Provide the employee with clear information about the plan choices, including coverage levels and costs, and clearly specify in writing a deadline date and time by which that employee must enroll (usually no more than 31 days after they are eligible to enroll). Usually, the plan information will be provided by your insurance company for distribution to employees.
Specify to the employee the consequences of not enrolling by the deadline.

Should you allow employees to opt out of the plan? If you want to make sure that your employees have coverage, you could impose a requirement that they either enroll at the minimum level or certify that they have coverage under another plan. However, if employees will have to contribute to the cost of the premium, you shouldn't force them to enroll. To protect yourself, you might ask them to give you written notification that they do not want coverage. By doing so, you'll have proof that you offered insurance in the event that an employee says that you didn't allow access to the health plan.

Making changes in coverage. Your insurance company may impose limitations on when you or your employees can make changes in the coverage. Often they will allow changes to be made only under certain circumstances known as family status changes or changes in work status. Family status changes include events like:

marriage
divorce
death of a spouse or dependent
birth or adoption of a child

Changes in work status include:

a change in an employee's spouse's employment (e.g., being fired or getting a new job)
a change in an employee's work hours (from full-time to part-time or vice versa)
an unpaid leave of absence

When these events occur, your employees may want to add or remove family members from their coverage. Be sure you know up front when these changes will be permitted.