Business Not as Usual: End of Year Cleanup and Conducting Open Enrollment During a Pandemic
While many employers are either in the process of returning to the workplace or gearing up to start 2021, the year in review and open enrollment processes will likely look quite different this year. With carriers distributing premium credits, health plans implementing temporary amendments to accommodate for COVID-19, and COVID relief laws set to expire at year’s end, plan sponsors and plan administrators have their hands full this last quarter of 2020.
Year End Review and Clean Up
During 2020, plan sponsors were challenged more than ever before with having to either close their business or convert to a remote work environment while trying to keep up with continued guidance from the Department of Labor (“DOL”) and the Internal Revenue Service (“IRS”) on the interpretation and application of COVID relief laws, and maintaining HIPAA privacy and security while trying to keep employees safe. With that being said, plan sponsors have several things to consider as the year comes to a close. Some important considerations are as follows:
- How temporary plan amendments for COVID are addressed in plan documents;
- How leave and election changes will be handled when COVID relief laws expire;
- How remote work will be managed for those employees who cannot or who choose not to return to the workplace;
- How carrier premium credits should be distributed;
- Whether Business Associate Agreements (“BAAs”) are needed with any new vendors/service providers;
- How to meet annual reporting and disclosure requirements despite COVID; and
- How open enrollment will be conducted for the upcoming plan year.
Open Enrollment During a Pandemic
Open enrollment is an involved process that requires clear communication and participation. In preparation for the upcoming plan year, employers will have to come up with creative ways to reach all employees, no matter what his/her workspace looks like. Below we will go over a few options for employers to consider while conducting open enrollment during a pandemic:
- Be on the forefront of social distancing. If an employer will be conducting in-person open enrollment meetings with employees, it should be prepared to socially distance in conference rooms, hold multiple information sessions, and add virtual options as well. Having shorter open enrollment meetings with additional question and answer sessions will allow employees the opportunity to be safe but also well informed. Another best practice would be to consider recording these sessions and/or creating a working document with FAQs so employees may get questions answered whenever or wherever he/she is enrolling for 2021.
- Consider going completely digital. Employers considering going completely digital will need to have an alternative means for reaching employees without access to a computer, internet, or email. For example, in addition to posting open enrollment guides and benefit notices on the company’s website or portal, it may be legally required for the company to send a paper copy of the guide and benefit notices to employees. While this may be more expensive, it may be the only way to get the required information to employees, especially if employees continue working from home.
- Consider a passive enrollment structure, at least for the employees who fail to participate in the active enrollment process. Passive enrollment will aid employers in avoiding negative messaging about employees and/or dependents losing their benefits in this uncertain time. Permitting evergreen elections (i.e., deferral elections) in cafeteria plans would only require employees to look at their flexible spending account elections. Employers will still need to notify employees of changes to the annual election limits for 401(k) and health savings account elections and that employees may make contribution changes at any time.
- Consider outsourcing or adopting a benefit administration system. Employers may consider outsourcing open enrollment communications and administration to a benefits enrollment firm. Such firms have call centers that are equipped to assist employees with the open enrollment process during a pandemic. Adopting a benefit administration system may provide efficiency and accessibility for not only remote workers but those in the office trying to social distance. With a self-service option for employees to make elections (and changes to elections as permitted), employers are able to cover all of their bases.
Employers considering adopting a benefit administration system should act quickly as the human resources staff will need to acclimate themselves with the platform prior to the start of open enrollment and will likely have to collect and input participant biographical data. Even if a benefit administration system is not adopted, employers will need to provide a secure way for employees to upload their private information and complete benefit elections.
In an ever-increasing technology driven world, employers need to be prepared for cyberattacks and have countermeasures in place to secure data against external (and internal) threats, especially with the upsurge in use of virtual meeting platforms. Such platforms, like Zoom and GoToMeeting, have increased the channels through which cyberattacks may occur.
Normal business processes may be disrupted, and valuable information, including private employee information or personal health information (“PHI”), may be exposed by these attacks. Employers should ensure they have a BAA in place with every contracted vendor/service provider. Performing a year-end review of all vendor BAAs to ensure one is in place with every entity that has access to PHI is another employer best practice.
In addition, employers should consider surveying level of preparedness for a breach. This may consist of regularly testing employees to ensure they are not exposed from the inside, which may include things such as IT sending fake phishing emails to ensure employees are aware of what phishing schemes look like.
Heading into the fourth quarter, employers and plan sponsors have more to keep in mind than ever before. Being proactive, preparing for all employee enrollment scenarios, and documenting every action taken will put employers in a good spot for the start of 2021.
The content herein is provided for educational and informational purposes only and does not contain legal advice. Please contact our office if you have any questions about compliance requirements applicable to your employee benefit plans or other HR compliance matters.
Dated: September 28, 2020