In this “new normal” we find ourselves in both personally and professionally, I thought the best article may be one of truth and logic. Now that sounds ironic, huh? If you are like me, I have had to slow my daily intake of the news. Not because the news is not part of reality, not because I do not want to be informed, and not even because I believe it is untrue. I am needing enough information to comprehend our new reality, stay informed, and attempt to stay positive.
With an attempt to stay informed and stay positive within our new reality – no better time than now to talk about insurance, specifically employee benefits. That last sentence just eliminated a good portion of the readership, but I promise, if you read on, there is value here!
Nearly every one of our almost 350 KASB members organizations have a Section 125 plan that includes both core (Medical, Dental and Vision) benefits and supplemental offerings (Flexible Spending Accounts, Dependent Day Care Programs, Disability, Cancer, Accident, etc.). With these benefits there is typically some member engagement with what is called a Third-Party Administrator or TPA to assist both with compliance of the plan and also enrollment assistance into the plan for employees. This enrollment process can take many forms. Within the education space our members reside in, the standard is some form of one-on-one enrollment process where an insurance professional works directly with individual employees to educate and evaluate needs and complete required paperwork.
Next, there is the operation of timing of that enrollment process. These plans renew with a “plan year,” and for many of our membership they have some version of a fall plan year or renewal month. Many of our members operate “early or spring enrollment periods” to avoid the fall rush of back to school. Or, more importantly, it allows the vendors to spread their service work out across many months as to not have all their work come 30-60 days before a plan year starts.
Reality – There is a new normal, and it is important to be informed about what is actually “required” at the employer level, both from an annual enrollment process as well as a timing of that enrollment operation.
Truth – A great majority of what is done annually within your Section 125 plan is driven by and from the vendors or TPAs that assist with the management of your plan.
Truth – A spring benefits enrollment period is not required by law; it is typically required by your TPA. Your focus should be on the rollout and management of your district’s continuous learning plan, feeding and supporting your students and families, not on recreating a new employee benefit enrollment process at this time. You can legally and easily suspend your employee benefits enrollment and still provide the same benefits value and support for your employees at a later date or even in a different enrollment format.
Truth – An annual enrollment is not required by law. It is typically required by your TPA. Your Section 125 plan governs that enrollment process, your TPA does not.
Truth – Annual enrollments or open enrollment windows are a benefit to your employees so they can educate themselves and make benefit changes or upgrades that work best for their families. Your plan document can drive what is allowed and legal from an enrollment perspective. You can and should drive this, not your vendor.
Truth – Several employee benefit enrollment options exist, and your plan document can drive this for you as the employer. Your options are as follows:
- Default/Negative Enrollment (utilizing default election language for employee’s initial plan year and rolling election for subsequent plan years)
- Negative Enrollment (utilizing rolling election only)
- Mandatory Enrollment
Truth – Flexible Spending Accounts (Medical Reimbursement and Dependent Day Care) are the only plans that require annual elections. There is great flexibility as to how to manage this annual required enrollment. Your vendors should work in support of this for you.
Truth – You, as the employer, have options. You, as the employer, should drive those options. Do not let the vendor dictate actions that are not required. In fact, employers can update or “amend” their plan documents to an enrollment option that is far more flexible and beneficial for both you as the employer and your remote workforce. Those amendments can occur now for this upcoming plan year.
Reality – As the employer, you and your plan document can dictate this process. You do have flexibility that you and your employees deserve during this time. Your vendors should support you during this time. Your 125 vendors should not be requiring processes that are more in support of their operations than your own local needs at this time.
Reality – You are the customer, not your TPA or benefits vendor.
Take the Control Back – Contact your TPA, express your concern and allow them to support you in your new reality. Remember everyone’s reality is different, yours is always the most important. They will respond.
We have you covered – KASB Risk Management Group stands ready to support you with questions you may have surrounding your 125 plans, enrollment procedures and compliance concerns.
We at KASB wish you all a safe and creative end to your school year. Continue supporting your students and your community during this trying time. Put operational processes in place to support that effort
Written By: Rod Spangler, Assistant Executive Director For Risk Management and Member Engagement
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