It is no secret that employer-paid benefits are a great way to attract valuable employees and keep them satisfied. These benefits can be defined as extra compensation on top of regular wages or salary. These “bonuses” usually consist of health insurance, disability coverage, and retirement savings plans, to name a few. Other perks are frequently offered as well, depending on the size of the company. Some of these may be exclusively offered to top employees or company executives.
Open enrollment periods are important times for employees to take advantage of the benefits their company offers. In most states, these are held annually around the same time each year. During this period, employees can make changes to, enroll in, or opt-out of group benefit plans, such as health insurance. The timeframe for this usually ranges between a few weeks to months.
Employers will let their employees know when open enrollment is nearing and what specific benefit options they offer. For this reason, Human Resource workers need to be knowledgeable in all of the options their company offers so they can answer any questions employees may have and guide them in the right direction. Appropriate technology can also be used to help streamline information. The most important things a company can do are to ensure clear communication, easy access to research materials, and provide adequate time for considering options.
Employer Paid Benefits & Open Enrollment FAQs
#1 What are Employer Paid Benefits?
As stated above, employer-paid benefits are added forms of compensation in conjunction with regular employee salary or wages. These typically include various forms of employer health benefits, such as medical, dental, and vision, as well as retirement funding accounts and disability plans. Other perks can include executive benefits, life insurance, and paid vacation time.
It is worth noting that just because they are called employer-paid benefits does not mean they are paid in full by companies. In fact, most employer group benefits are covered partially by the company with the employees making up the difference.
#2 How Much Does Providing Benefits Cost To An Employer?
The cost of employee benefits to employers can be off-putting if options haven't been researched in-depth. There are a number of factors that will contribute to the cost, such as:
- What benefits will be offered
- What insurance groups you use for coverage
- How many employees sign up for any given type of benefit
With that said, employee benefits cost to employers averaged $12.06/hour per employee as of June 2021. (According to the Bureau of Labor Statistics) This equates to 31% of a worker's overall compensation.
#3 What is Open Enrollment & When Is It In Arizona?
Typically, employees are offered benefit enrollment when they first become eligible after being hired as full-time. Open enrollment allows a time outside of this window for individuals to make changes to current plans and enroll in them for the first time if they haven't already taken advantage of them.
This year, Arizona open enrollment runs from November 1, 2021, through January 15, 2022. However, it's worth noting that if participants would like to have coverage effective January 1, their applications must be submitted by December 15.
#4 When Can An Employee Change Health Insurance Outside of Open Enrollment?
Circumstances change for people all the time. These can leave people wondering, “Can I change my benefits after open enrollment?” There are a few extenuating circumstances that allow employees to change insurance after open enrollment periods. These are called Special Enrollment Periods. Qualifying events include, but are not limited to, the birth of a child, marriage, or losing health coverage. Needless to say, it's important for employees to make informed decisions for their benefits during open enrollment since they cannot be easily changed until next year's open enrollment period.
#5 When Do Open Enrollment Changes Take Effect?
If enrolled by January 15, 2022 (the cut-off date), coverage will begin February 1st. Again, if an employee would like their new health insurance coverage or changes to take effect on January 1, 2022, they will need to enroll by December 15, 2021. So, the longer employees wait to file their changes, the longer they will take to go into effect.
#6 How Much Does Employer Health Insurance Cost?
According to the Bureau of Labor Statistics, health insurance costs employers an average of $3.09/per hour worked. According to the Bureau of Labor Statistics, health insurance costs employers an average of $3.09/per hour worked.
Most states require businesses to pay at least 50% of health premiums for each employee covered. In 2020, an average of 83% of coverage was paid by employers for single coverage and 73% for families. This equates to $6,200 per single employee coverage/year and $15,579 per family coverage plan.
#7 How Does Employer Health Insurance Work?
Employers generally choose to offer group health insurance because it makes handling it easier and is less expensive for all involved. Even among the same insurance provider, different coverage options are available to employees, whether it be individual or family coverage, health, dental, disability coverage, etc. Though they vary among insurance providers, most require employers to pay at least 50% of coverage premiums. (Of course, companies can choose to cover more than that.) The remaining amount is up to the employee to take care of.
#8 Can Employees Opt-Out of Employer Health Insurance?
Another question that often comes up is “Can I cancel my employer health insurance?” Yes. Employees can choose to drop their coverage during open enrollment periods, or any time of the year. They will need to keep in mind there is up to a 14-day delay, so they will still be responsible for premiums during that time.
Employees are not required to participate in employer-offered health insurance. They could already have coverage through a spouse, through Veterans Affairs if they previously served in the military, or already have private insurance they are happy with.
#9 How Can Employees Get Health Insurance Outside of Open Enrollment?
Figuring out how to get health insurance outside of open enrollment can be tricky. There are a few options, though. Special Enrollment Periods (SEP) offer enrollment if certain life circumstances have occurred, such as losing health coverage, adding or losing a member of your family, etc. Barring that, individuals can acquire coverage through private insurance companies. (Though this is much more costly for employees than group plans offered by employers.) A final option is short-term health insurance, which can provide coverage until the next open enrollment period comes.
#10 What Happens if an Employee Misses Open Enrollment?
If an employee misses the open enrollment period for whatever reason, they will have to resort to one of the options listed above if they need health coverage right away. If coverage is not a pressing matter, they will likely have to wait until the next open enrollment period. These are held annually near the end of the year in Arizona. This provides employees time to research their options and gain coverage promptly in the next year.
Conclusion
Employer benefits can be a worthwhile investment to keep employees happy, healthy, and on the job. It can be confusing navigating all of the coverage options, especially for healthcare, so it's important for Human Resources to be knowledgeable and helpful. This can mean “having an open door policy” during open enrollment season and offering assistance and information when needed.
Open enrollment only comes once per year. That's why it's critical that employees understand their options and enroll or make changes promptly to start receiving coverage as soon as possible. It is very difficult to make changes to healthcare plans outside of this end-of-year window, barring an event that would qualify someone for a SEP. While there are other options to obtain coverage, such as private insurance, they tend to be much more expensive than group health plans.
Have questions about Arizona's Open Enrollment Period? Need help handling all of your employees' questions? Chat with one of our professionals today!