How to Effectively Communicate Health Insurance Benefits to Employees
Now comes the matter of distributing complex health care material. It's important to explain how to enroll, when to enroll, available insurance options, eligibility, and other health care-related terms (premiums, deductibles, out-of-pocket, etc.).
When to Sign Employees Up for Health Insurance
There are only certain times when small business owners can add employees to the group plan. Ensure clear communication with employees when discussing enrollment windows, dependents, and changing plans.
Waiver of Coverage
- An employee may waive their right to join the group health insurance plan. If they do, they will only be able to opt-in during a once-a-year period or if a qualified status change occurs.
Existing employees can opt-in for health care coverage:
- During the once-a-year open enrollment period
- For many small businesses, the open enrollment period for employees to sign up for coverage is typically one month before the policy renewal date with a one-to-two-week window for them to change their coverage.
- If they experience a qualifying status change such as:
- Having a baby/adoption
- Getting married/divorced or legal separation
- Death of a dependent or spouse
- Change of spouse’s employment/benefits
Employees can be removed from the health insurance plan:
- When the employee is terminated, or
- If they experience a reduction in hours or classification
To sign employees up for health insurance, you'll need them to provide the proper documentation. They can either present a U.S. passport, a Certificate of Naturalization (DHS Forms N-550 or N-570), or a Certificate of U.S. Citizenship (DHS Forms N-560 or N-561).
If those are not available, view our Special Enrollment Period: Valid Documents Chart resource.
Legally required information by the Affordable Care Act
Specific laws in the Affordable Care Act (ACA) require employers to provide certain information to employees enrolling in health care. This includes:
- Exchange Notices
- Summary of Benefits and Coverage
- Summary Plan Description
- W-2 Reporting of Health Costs
- IRS Form 1095
- COBRA Notice (if applicable)
Frequently Asked Questions Employees have about Health Insurance
- Is it better to get health insurance through work?
- While not always the case, it may be cheaper for employees to enroll in health insurance coverage through work than to purchase through the open marketplace.
- What are the benefits of health insurance?
- While no longer federally required, ensuring coverage is a proven means of protecting an individual from potentially expensive health care costs.
- Can I opt out of health insurance?
- Employees do not need to enroll in work-provided health insurance. Individuals can explore the marketplace for a health care plan best suited for their needs.
- How do I choose between plan options?
- Different plans from different insurance companies offer vastly different coverage. Be sure to read up on HMOs (Health Maintenance Organization) and PPOs (Preferred Provider Organization) to help your employees choose which insurance plan is best for them.