If you receive health benefits from your employer or are enrolled in the company 401K plan, then you’re most likely subject to open enrollment rules. Basically, that means you can only make changes to your plan at designated periods unless you experience a life status change. Here are some basic questions and answers about the open enrollment period.
How Does the Open Enrollment Period Work?
During open enrollment, you can make changes to your health plan, which includes switching to a new plan if your company offers more than one, adding or removing beneficiaries, increasing or decreasing coverage, or opting out of coverage entirely. Open enrollment typically lasts one to two months and you should receive a notice from your employer announcing the period in case you need to make changes.
Many retirement plans also have open enrollment periods. These are usually quarterly, but could be yearly. Open enrollment is the time when you can join the plan, leave the plan, or change your contribution level.
Do I Have to Wait Until Open Enrollment if I Get Married? If I Have a Baby?
Although I have met one person who could only add a new child to her health plan during open enrollment, most plans allow you to make changes outside of open enrollment if you experience a “life status” change. Life status changes include:
- A child surpassing dependent eligibility (usually 24 or college graduation)
- A change in employment for you or your spouse.
That last one can be tricky, though, so change your plan during open enrollment if your spouse is planning to leave the workforce before the next period.
What Should I Do If I’m Planning a Life Change?
If you currently have a baby on the way, you should contact HR to ask if you need to add the dependent now or can wait until the baby arrives. Do the same if you’re planning to get married. Most of the time you can wait until the event occurs, but some plans don’t allow changes outside the period. You don’t want your baby born without coverage. At any rate, you’ll need to know about parental leave or other benefits, so this is a good time to cover all your bases.
If you’re planning to retire, you should also ask HR what you need to do to prepare for that. There may be paperwork to complete in order to start receiving benefits.
Must New Employees Wait for Open Enrollment?
In most cases, new employees can be added to either a health plan or retirement plan immediately or at the end of the waiting period. Most waiting periods are a maximum of 90 days. Ask your new employer about the waiting period before leaving your old job so you can arrange for COBRA coverage or transfer to your spouse’s employee health plan during the interim.
When Is Open Enrollment?
For many employers, open enrollment occurs during September or October. Some employers have it in January if their fiscal year is also the calendar year. Many government entities have open enrollment during May or June, which is also usually when their annual budgets begin. If you don’t know, ask your HR director now and mark your calendar for the start of the next period.
What Do I Do if I Missed Open Enrollment?
Unless you’ve had a life status change, you’re probably out of luck until the next period.
Although open enrollment periods are strict, they’re easy to manage if you’re aware of the dates and take action during that period. This is not a time to hem and haw. Make changes while you can, otherwise you’ll have to wait another year.