Open Enrollment: Non-ERISA

State & Municipal Government Plans
Open enrollment for health and welfare benefit plans is not required by law.  Therefore, it is up to the employer to decide whether to provide regular open enrollment periods, as well as the enrollment and eligibility rules.

Materials

Employers should provide employees eligible for participation in a health & welfare plan a written explanation of the procedures for enrolling, along with the appropriate forms. In general, the materials should be accurate and give the individual enough information to make an informed choice.

The Summary Plan Description (SPD) can be used for this purpose, as long as it is distributed to all eligible employees (not just those who enroll in the plan). If summary information about the plan is used, it must be consistent with the SPD and other benefit descriptions.

In general, open enrollment materials should include the following:

• Statement of what happens of employee fails to do anything
• Cafeteria plan election options and amount of required employee contributions
• Eligibility Rules
• Benefit Descriptions
• Election Forms
• Notice of Special Enrollment Rights
• General Notice of Preexisting Conditions (if applicable)

The forms should clearly state that eligibility is based on the terms of the plans, and cannot be presumed just because open enrollment information was provided. In other words, simply receiving the forms does not automatically mean they are eligible to participate in the plan.

Depending on the timing of an open enrollment period, employers may also want to consider providing other notices with their open enrollment materials, such as:

• Women’s Health and Cancer Rights Act (WHCRA) Notice
• Preexisting Condition Exclusions/Special Enrollment Notice
• COBRA Initial Notice
• HIPAA Notice of Privacy Practices
• Uniformed Services Employment and Reemployment Rights Act
• Medicare Part D Notice

(Please see the section entitled “State and Municipal Government Plans – PHSA Exemption”, or visit www.cms.hhs.gov/SelfFundedNonFedGovPlans to see if your plan is subject to these laws.)

Recipients

Employers must ensure that all eligible employees receive open enrollment materials. Otherwise, the employer may be responsible for benefits to eligible individuals who are not enrolled in the plan because the employer did not provide or process the necessary forms.

Employers should also remember that certain inactive employees and their beneficiaries may be eligible for the plan(s) and take steps to deliver materials to them.

In general, employers want to consider the following groups of employees when distributing open enrollment materials:

• Active Employees
• New Hires
• Retirees
• Spouse or Dependent of Deceased Retiree Participants
• Employees on leave due to FMLA, USERRA, disability or other
• COBRA Qualified Beneficiaries
• QMCSO Alternate Recipients, Guardians or Legal Representatives
• Guardian or Representative of Incapacitated Persons

Delivery

ERISA does not specifically address how open enrollment materials should be delivered.

However, when choosing delivery methods, an employer should keep in mind that:

• It may have to prove in individual cases that information was provided
• Any accompanying ERISA materials, such as certain notices (WHCRA, COBRA, etc.) must be distributed according to ERISA guidelines.

To ensure full compliance, many employers choose to follow the requirements for delivery of ERISA materials. Click Here to review those requirements in the Geek Out! Delivery Methods page.