Kathleen Dugan, Chief Operating Officer, Johnson & Dugan
Jody Lee, Compliance Manager, Johnson & Dugan
With the end of the year coming quickly, many companies are starting to prepare for Open Enrollment. Invariably, there are employee questions that come up, so we have prepared a list of the most common to assist you during the busy season.
My spouse’s company benefit plan holds open enrollment in October, and our plan has open enrollment in December. Can he drop his plan in October and join our plan, even though it isn’t our company open enrollment yet?
Yes, Open Enrollment under the Employer Plan of your spouse or dependent is a Qualifying Event that will allow you to add coverage to your plan. A spouse or dependent could join the employer plan within 30 days of the Open Enrollment cancellation of coverage for their plan.
Do I have to send out a COBRA notice to employees who are adding dependents to the plan?
Yes, a Notice of COBRA Continuation of Coverage Rights must be provided to all new plan participants, as each covered individual is considered a “qualified beneficiary” with their own rights. The notice should be addressed to “Family of [Employee]” and mailed to the employee’s home address.
Do I have to send out COBRA notices for employees deleting dependents from the plan at Open Enrollment?
No, Open Enrollment is a voluntary removal of a dependent that does not trigger a COBRA event.
Do I have to allow COBRA participants the same Open Enrollment as I do for my active employees?
Yes, COBRA participants are entitled to the same rights as active employees, including Open Enrollment. COBRA participants can switch between medical plans, or add or delete eligible dependents during the Open Enrollment period. Please note, however, that dependents added during a COBRA Open Enrollment period are not considered “qualified beneficiaries”, and do not have their own separate COBRA rights.
Do I have to send an updated EOC and SPD to those newly joining the plan or if there is a plan or carrier change?
Yes, new plan participants must be provided with the SPD within 90 days of enrolling on the plan. If a plan change results in a material reduction in benefits, notice to plan participants (in the form of a Summary of Material Modification) must be provided within 60 days of adoption. If changes are not a material reduction in benefits, notice must be provided within 210 days after the close of the plan year in which the change was adopted.
Do I need to have all my employees complete a new payroll deduction form every year?
Payroll Deduction Forms can be designed so that they are completed only when changes in the contribution amounts occur. The form should be reviewed each year, and if any changes to the form are required, then each employee should sign a new form.
What is the normal Open Enrollment period I should give my employees? Is two weeks plenty of time or should it be more or less?
Two weeks is generally a sufficient amount of time to conduct Open Enrollment. Larger companies with extensive changes or a complex plan of benefits may need more time. At a minimum, employees should have several days from the time of an employee meeting or formal communication, including a weekend. This gives the employee a chance to review the information with family and discuss plan choices.
For additional information, contact your Johnson & Dugan Team.
