Is open enrollment mandatory

[Guest Amber]

Is a health plan required to offer open enrollment every 12 months. We are an October renewal but making plan changes for January 1st. We'd like to push back open enrollment until November this year, but that makes it over 12 months since our last open enrollment.

In scouring the DOL and various web sites, it talks to special enrollment as mandatory to enroll outside of initial hire, and mentions open enrollment but does not appear to require an open enrollment period every 12-month.

Thoughts?

Thanks,

Amber

[J Simmons]

If your health plan coverage is offered to employees as part of a cafeteria plan, then yes, I think you have to have open enrollment preceding each 12 month plan year and allowed shorter plan year. Prop Treas Regs §§ 1.125-1(d) and 1.125-2(a).

I would suggest that you have a 3 month short plan year (October - December 2009), and have an enrollment for it in September. You could have that September open enrollment do double duty--it could be your open enrollment for your 2010 calendar plan year. But I think you would have to give employees two choices during the September open enrollment period, one for the October - December 2009 short plan year and a second for the 2010 plan year, and employees would have to be allowed to differ their two choices.

[Guest chloe]

Actually, a true "open enrollment" is not required under federal law (although it is required under some state laws if the plan is insured). Under open enrollment, individuals who had previously been offered coverage but declined to enroll must be allowed to enroll at subsequent open enrollment periods. They'd be considered a late entrant unless they were enrolling due to a special enrollment event. What the cafeteria plan rules require is an annual payroll deduction election where individuals must choose to have premiums deducted from their pay to pay for coverage. But those who had previously declined coverage are not required to be allowed to enroll. I know it doesn't seem like a big difference, but it is and many plans these days are eliminating true open enrollment periods.

[Guest Lamb Chop]

Actually, a true "open enrollment" is not required under federal law (although it is required under some state laws if the plan is insured). Under open enrollment, individuals who had previously been offered coverage but declined to enroll must be allowed to enroll at subsequent open enrollment periods. They'd be considered a late entrant unless they were enrolling due to a special enrollment event. What the cafeteria plan rules require is an annual payroll deduction election where individuals must choose to have premiums deducted from their pay to pay for coverage. But those who had previously declined coverage are not required to be allowed to enroll. I know it doesn't seem like a big difference, but it is and many plans these days are eliminating true open enrollment periods.

I agree with Chloe's analysis above on this issue, at least pre-ACA. I have a plan that does not offer open enrollment currently. Does anyone out there think that anything in health care reform has changed this and imposed periodic open enrollment as a mandatory feature in a self-insured health plan?

The specific situation involves 20-something children who were given the one-time opportunity to enroll under the under-26 rule, declined, and now want in, without satisfying any of HIPAA's special enrollment criteria.