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Annual enrollment can be defined as a discrete time period in a calendar year when workers sign up for or can make changes to certain benefits like health insurance, 401(k) contributions, or health savings accounts. It can also be defined as yearly enrollment in programs like Medicare, which is through the Medicare program in the US and not generally initiated by employers. Any type of enrollee is advised to take this time period seriously and return all requested documents promptly because this may be the only time of year to make decisions about benefits, with a few noted exceptions. Since declining or electing to participate in certain programs may mean signing contracts or agreeing to reduce pay, this period should also be considered a good opportunity to ask questions about benefits the company offers from either human resources or companies involved in administering the benefits.
Many workers will have an annual enrollment period in January, but not every business holds to this standard. Some companies may determine this time based on their fiscal year, which might begin in any month. Whenever this period occurs, companies will usually let workers know in advance and they may even hold seminars and informational meetings to explain any changes. In this way, employers are able to help workers make the most informed choices about which benefits they may want in the coming year.
As mentioned, many benefit types are only subject to change during annual enrollment. There are a few exceptions to this rule. Certain benefit elections may be updated if a worker has what is called a qualifying event. For health insurance, qualifying events are usually a marriage, a divorce, a death, or the birth or adoption of a child. Catastrophic financial circumstances brought on by things like severe illness may also sometimes count as qualifying events to change contributions to health savings accounts or 401(k) plans.
The other exception to this enrollment period is that new employees may enroll for benefits at the point of hire. This could mean that their next period of annual enrollment wouldn’t be a year away. In some cases, it is only a month or two from when the individual became an employee. Note that some companies don’t grant all benefits to newly hired workers, and some may not offer health insurance coverage to new employees for several months.
Many employee advocacy groups urge workers to take the time and ask questions whenever they make changes during an annual enrollment period. Generally, it’s important to note changes in price, coverage, tax law, or in other features that could affect a person in many areas of life. For example, a 2012 US tax law change limits the dollar amount of contributions to health savings accounts. Employees may take this into consideration in deciding how much money they want to save for health expenses during the year. Another case in point is the many alterations that may occur with health insurance; companies may change the provider and/or the terms of the insurance, and this may greatly affect employees.
Most companies work hard to give information to employees about their obligations during annual enrollment. When this is not the case, workers are advised to be aware of the period and seek out human resource employees about a month in advance to ask about changes. Knowing the last day of enrollment is important, too, because late paperwork may mean a worker forgoes opportunities to change his or her benefit elections.
Those receiving Medicare are also advised to be aware of the enrollment period. Government websites offer helpful advice and information on how and when to enroll. People can also call government helplines for information and can talk to outside agencies like the American Association of Retired People® (AARP®) for more tips on making health insurance choices.
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