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Open Enrollment Checklist

Thursday, October 1, 2020

 

For employers operating their group health and welfare plans beginning on or after Jan. 1, 2021, now is the time of the year to prepare for open enrollment.  Typically, the focus is on evaluating the services and performance of vendors, renewing rates, and considering design changes.  In addition to these items, employers need to address various legal requirements.  This Benefits Brief provides a checklist that covers these requirements for the 2021 plan year.

 

Inflation Adjustments in Annual Limits

Several annual limits apply to health and flex plans which may be adjusted each year for changes in the cost-of -living.  The new amounts should be considered upon renewal.

Health Plans – – Excluding HDHPs & Grandfathered Plans
Annual Out-of-Pocket Maximum
Individual $8,150 $8,550
Family $16,300 $17,100
High Deductible Health Plans
Annual Out-of-Pocket Maximum
Individual $6,900 $7,000
Family $13,800 $14,000
Minimum Deductible
Single Coverage $1,400 $1,400
Family Coverage $2,800 $2,800

 

Health Savings Accounts (HSA)
Maximum Annual Contribution
Single Coverage $3,550 TBD
Family Coverage $7,100 TBD
Age 55 Catch-Up $1,000 TBD
Flexible Spending Accounts (FSA)
Maximum Annual Contribution
Medical $2,750 TBD
Dependent Care $5,000 TBD

 

The above limits are all required to be followed except in the case of the medical FSA limit which is optional (employers can set a lower limit).  There are a couple of items to highlight the maximum out-of-pocket limit for non-grandfathered health plans.  First, the limit can be divided so a portion applies to the medical benefit and a portion applies to the prescription drug benefit.  This may be needed if the plan has separate medical and prescription drug administrators.  Second, if a plan has a family maximum out-of-pocket that is greater than the individual maximum out-of-pocket, there must be an embedded individual maximum out-of-pocket within the family limit so that no individual is subject to a maximum out-of-pocket greater than the individual amount.  For an HDHP, however, the embedded maximum out-of-pocket can’t be less than the minimum family deductible for HDHPs.

 

Preventive Care Benefits

Non-grandfathered plans must cover certain preventive care benefits at 100% with no participant cost-sharing.  The list of required preventive care is updated periodically on the Healthcare.gov website.  Employer group health plans must include any new items by no later than the beginning of the first day of the plan year starting one year after any new guidelines or recommendations are issued.  For example, employer group health plans operating on a calendar year must offer the following new preventive care items with no participant cost-sharing as of January 1, 2021:

 

Annual Participant Notices

As you prepare the open enrollment materials do not forget about the required participant notices which must be furnished annually.

 

Additional Resources

 


 

This Benefits Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

Posted by in Blog, Health & Benefits, Human Resources

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