Don’t Let Post-Enrollment Oversights Lead to Costly Penalties

Don’t Let Post-Enrollment Oversights Lead to Costly Penalties. The beginning of the year can be an exciting time for businesses—employees return to work refreshed, and a new fiscal year begins, leading to new budgets and hiring plans. But as the first quarter begins and operations resume, now is not the time to put the brakes on your employee benefits programs.

Following open enrollment, several deadlines exist that need to be addressed and completed to meet regulatory requirements. For example, employers must distribute Summary Plan Descriptions (SPDs) to their employees within 90 days of coverage beginning.

Post-Enrollment Oversights Lead to Penalties.

Mandated and regulated by ERISA, Summary Plan Descriptions are required by law. Failure to comply could result in costly fines for organizations. To avoid penalties or legal action, employers must provide employees with information about their plan, including a clear overview, claims procedures, source of contribution, eligibility requirements and more—written in a language employees can understand.

How and when employers must provide these documents to employees can vary. For example, if there are material changes to the plan, the SPD must be updated and distributed to employees. An updated SPD must be provided to participants within 210 days after the end of the plan year.

Employers who have questions or are unsure of these rules should consult a trusted benefits consultant.

Open enrollment may have concluded, but maintenance and review should be ongoing.

Summary Plan Descriptions are just one example of post-enrollment deadlines and compliance that employers need to be aware of. Other key considerations are:

• Meet legal and regulatory requirements. Following open enrollment, several compliance requirements must be met to avoid penalties. For example: Employers subject to Affordable Care Act (ACA) reporting rules should be ready to meet deadlines in early 2025. For the 2024 calendar year, covered employers are required to:

• Provide statements to individuals by March 3, 2025 (in some cases, there may be an alternative method for sending statements) and;
• File returns electronically with the IRS by March 31, 2025 (or by February 28, 2025, if submitted on paper). Employers that file at least 10 returns during the calendar year must file electronically.

• Accurate enrollment. Ensure employee selections are accurately recorded and implemented. If an employee selects the wrong plan or misses a deadline, they may be surprised by higher premiums or find themselves without coverage. These types of errors can leave employees feeling confused and frustrated.
• Communicate changes. Employees may need clarification about changes to programs or new offerings—and who to go to with concerns or questions. Having a consultant who is able to answer in person—one-on-one—is helpful and can be more straightforward and efficient.

To avoid costly fines or possible legal action, employers need to ensure compliance is met and rules and regulations are followed. This includes consistent communication with employees and monitoring for changes in healthcare policy. All year.

At any time during the year, employees could experience life events that may lead to changes in their benefit offerings, such as marriage or the birth of a child. Policy requirements can also change. For example, the overturning of Roe vs. Wade in June 2022 had a significant impact on many employee benefits programs in the United States.

It’s important to stay vigilant with your benefit offerings.

Now is not the time to take your foot off of the gas.

Taking a proactive approach during the post-enrollment period—and throughout the year—can help your benefits program stay compliant, identify and address possible issues earlier and ensure employees understand and utilize their benefits.

Don’t wait to address compliance within your benefits program. Deadlines are approaching. If you have questions, reach out today.

Post-Enrollment Scorecard

Open enrollment is a critical time for any organization, and we want to help you reflect on how it went this year. Our simple, easy-to-complete scorecard takes just a few minutes and provides valuable insights into your process, employee satisfaction, and potential areas for improvement. Get your scorecard now!