(By Louis Toffoli)
With open enrollment right around the corner, this is the time for business owners to inform their employees about signing up for the new coverage plan. The federal open enrollment period is from November 1st to December 15th, requiring all employees to submit their documentation.
As an employer, you also are responsible for notifying your employees about the upcoming enrollment and their coverage options. You will need to distribute notices before or during the enrollment process.
However, you may be wondering, “what happens if you fail to notify your employees?” In this article, we will be going over any legal ramifications you may receive if you wait too late to inform your employees.
What Notifications Should Businesses Give to Employees?
As part of the law in the United States, HR employees are required to give annual notices related to open enrollment and health insurance plans. There are three main notices that you must give, and some that are recommended to keep your employees up-to-date. These three notices are:
- Medicare Part D Notice of Creditable Coverage
- Notice of Women’s Health and Cancer Rights Act (WHCRA)
- Notice of Children’s Health Insurance Program (CHIP)
The benefits administrators should send these notices to your employee’s emails and be put in a public place that all employees can view easily. Now, let’s explain the importance of these notifications for your employees and when they are due.
Medicare Part D Notice
Before October 15th, the notice of Medicare Part D is to give employees information on the plan’s prescription drug coverage. When notifying employees, they will receive information on the status of their prescriptions for the upcoming year.
The notice will also determine the person’s eligibility status, including active employees, disabled employees, and retirees. Due to most employers not knowing the eligibility of employees, this should be sent to all employees in the group plan—regardless of their status.
Women’s Health and Cancer Rights Act Notice
This annual WHCRA notice has no required date to be followed, but it’s recommended that you notify employees during enrollment. The purpose of this notice is to inform employees of the coverage for procedures unique to women.
These procedures include reconstructive surgery and similar medical operations following a mastectomy. These notices should be delivered by letter or electronically following ERISA disclosure rules.
Children’s Health Insurance Program Notice
The last required notification employers need to give is coverage for children’s health insurance programs. These programs are typically CHIP or Medicaid, helping families cover their children with health insurance.
There is no required deadline for notifying employees of this program. However, this program is commonly shared with other annual notices for employees. With all of these programs covered, there are a few other notices recommended.
What Optional Notices Should You Give to Employees
While there are only three primary notices you need to give employees, two others keep employees better informed. The first notice recommended is the HIPAA special enrollment notice.
The HIPAA notice informs employees that they can join an employer’s group healthcare plan outside of enrollment under specific circumstances. Some of the most common reasons you would need to update healthcare coverage is losing coverage from another plan or acquiring new dependents.
Another notice that would benefit your employees is the Patient Protection Notice. This healthcare notice will inform employees about their rights and they will need to designate a primary care provider.
What Happens If You Fail to Notify Employees?
Notifying your employees of their health insurance enrollment and benefits is necessary for employers. When you forget to notify your employees before the deadline of required notices, you will be subject to fines.
According to the Department of Labor, you can expect to receive fines for each employee not notified every day after the deadline. When you fail to notify your employees about their Children’s Health Insurance Program, you will be fined $119 per day.
These fines are given per employee, resulting in hefty fine payments within the first few days of not delivering notices. If you do not notify employees of the Women’s Health and Cancer Rights Act, you will be fined $100 per day.
Keeping your employees informed on their health insurance plans is an essential part of being an employer. There are three main notices that you must give employees, with a few optional ones that are good to share. If you don’t give the required notices, you may be subject to fines until you do.