Employer’s Guide to Open Enrollment in Hawaii

Building the right team is crucial for business success, especially in Hawaii's competitive job market. To attract and retain talented employees, offering competitive employee benefits has never been more important. While health care remains a significant component, voluntary benefits are also gaining importance, with 85% of employees recognizing their value. Open enrollment for health plans can be a complex process, but it is a vital step in taking care of your team for the upcoming year. In this article, we will provide a clear explanation of open enrollment, how it works, and what you can expect.

What is open enrollment?

Open enrollment refers to the annual period when your healthcare provider reviews your policy and determines pricing for the following year. It is the time when healthcare providers introduce their updated rates and offerings, allowing you and your employees to select the most suitable plans.

Why does it happen every year?

Open enrollment occurs annually because circumstances change for providers, employers, and employees alike.

• For providers, open enrollment is the time to make sure plans are compliant with new local and federal rules and regulations. It's also a time to adjust prices for inflation and reassess risk.
• For employers, open enrollment allows you to evaluate how your organization has evolved over the past year and make adjustments to your benefit offerings accordingly. For example, if you added a new layer of management this year, you may want to review and adjust your benefit groups and their offerings for next year.
• For employees, open enrollment is also when employees can reassess their own needs and select the plans and coverage that make the most sense for them and their families. They’ll have the opportunity to switch plans, add a dependent, or opt-out if needed.

What's the process like?

For employers, open enrollment involves several stages:

1. Provider Evaluation: Healthcare providers initiate the open enrollment process by evaluating their prices and services and making necessary adjustments to their plans. Factors such as inflation, rising health care costs, and new prescription drugs contribute to pricing changes.
2. Employer Review and Plan Selection: Once you receive your plan options, you can renew your plans if you are satisfied with the rates and coverage and want to minimize changes. However, if your company's needs have changed, open enrollment is an opportunity to adjust your offerings. You can also determine your contribution towards the policy cost and the employee's share.
3. Employee Open Enrollment. After you have selected your employee offerings, it is time for your employees to choose their health insurance plans and coverage for the next year. They can renew their current plans or switch to more suitable options based on their situation and budget. Additionally, they can select voluntary benefits like 401(k) retirement plans or Flexible Spending Accounts.
4. Finalization and Coverage Starts: Once employees have completed their selections, they are enrolled in their chosen plans, and coverage begins as per the insurance provider's specified date.

When is open enrollment? 

The timing of open enrollment depends on your insurance provider. If you provide your employees with health benefits through a PEO like ProService Hawaii,  you’re part of a larger health insurance policy. That means the policy will renew at the same time each year, not on the anniversary of when you joined.

At ProService Hawaii, open enrollment for employers typically begins in September, and employers are given a few weeks to select their employee offerings. After that, employees get the opportunity to select their benefits for the coming year, and new coverage goes into effect on January 1.

What steps can I take to prepare?

As an employer, you play an active role in the open enrollment process.

Here are some steps you can take to prepare.

• Understand Employee Needs: Conduct an employee survey or seek feedback to gain insights into their health and financial needs and their satisfaction with current health plan offerings. Determine which voluntary benefits they would like access to in the coming year.
• Define Your Goals and Budget: Set your goals and establish a budget for the next year. Planning ahead will help you make informed decisions about the most suitable plans for your team. Note: Historically, healthcare costs go up every year, so it's a best practice for employers to budget accordingly.
• Match Needs to Available Plans:  Now that you have your priorities for the next year, review available plans and rates for the next year to assess which ones best meet your needs and budget.
• Communicate Effectively: Once you have selected your plans, inform your employees about the upcoming open enrollment. Emphasize the importance of their selections, as changes outside of qualifying events (e.g., marriage, divorce, or the birth/death of a child) won't be possible until the next open enrollment period.
• Keep Dates and Deadlines in Mind Give yourself and your employees ample time to complete the open enrollment process by staying aware of important dates and deadlines.

The power of partnership 

Open enrollment is an essential aspect of every employer's responsibilities. Whether your focus is attracting and retaining diverse talent through comprehensive benefits or obtaining competitive rates on the local market, partnering with an HR organization like ProService Hawaii can be invaluable.

With ProService Hawaii, you gain access to the necessary building blocks for a competitive benefits package, including health plans, retirement plans, and voluntary benefits. Leveraging their group's buying power, ProService Hawaii negotiates competitive rates with trusted providers, ensuring affordability. Moreover, as a ProService partner, you receive support from local experts passionate about helping employers and their teams succeed in Hawaii.

Open enrollment is an opportunity for employers to offer competitive benefits and for employees to make informed choices about their health care and voluntary benefits. By understanding the open enrollment process, preparing ahead of time, and leveraging the expertise of an HR partner like ProService Hawaii, you can navigate open enrollment successfully and provide your team with the support they need for the upcoming year.

Want to learn more? Download our free guide: The Ultimate Guide to Employee Benefit Packages in Hawaii.