5 health insurance open enrollment changes this year-end

No matter what choices employees make during open enrollment, one thing’s for sure: Your team has their work cut out for them before the first payroll of 2022.

Take a moment now to make sure you’re up to speed on the latest law and reg changes. They’re coming your way in the aftermath of COVID.

1. Health insurance premiums up/down

A group health plan can offer a premium discount or add a premium surcharge depending on whether a participant has received the COVID-19 vaccine.

That’s what the Dept. of Labor said in guidance on Oct. 4, 2021. But the guidelines for activity-based wellness programs must be met.

Remember to give employees a heads-up about how their premiums will decrease or increase in 2022. That should prevent an influx of questions later.

2. Extra time for COBRA

As usual, employees who have elected COBRA continuation coverage should be given open enrollment info and be permitted to make changes.

But this year-end the process may feel more up in the air to you.

That’s because the COVID-19 “outbreak period” hasn’t officially ended yet.

Therefore, employees have more time than usual to elect COBRA continuation coverage and start paying their premiums.

As IRS recently clarified in Notice 2021-58, individuals who wait to make a COBRA election may not have more than one year of extra time for the COBRA election and initial COBRA payment.

3. Health FSA carryover

All or part of the unused amounts remaining in a health (or dependent care) flexible spending arrangement (FSA) can be carried over to 2022.

That’s important for employees to know during open enrollment as they consider how much money to set aside next year.

There’s a caveat: You must amend your cafeteria plan to allow for the carryover of the unused amounts remaining in a health (or dependent care) FSA, IRS said in Notice 2021-15.

Otherwise, the maximum amount an employee can carryover from 2021 to 2022 is $550.

4. Electronic medical child support

If you receive a National Medical Support Notice (NMSM), you may need to start withholding from the employee’s wages for medical child support ASAP or when open enrollment comes around – follow the order accordingly.

Caution: Does your health plan offer dependent-only coverage? If not, check on whether the employee for whom you’ve received the NMSN signs up for health insurance coverage during open enrollment so the child, or children, can receive coverage, too.

Also, be aware of a new development with the NMSN: a push toward electronic communication on the part of states and employers.

Specs have just been released, so expect a mix of paper and electronic medical child support orders for now.

5. State disability insurance requirements

While your company may choose to offer short-term disability insurance during open enrollment, in five states the insurance is required.

Those states are California, Hawaii, New Jersey, New York and Rhode Island. Here are some recently released updates for 2022:

In California, the short-term disability withholding rate will be 1.1%, and the annual taxable wage limit per employee will be $145,600.

In New Jersey, for temporary disability insurance, the employee contribution rate will be 0.14%. The taxable wage base for employees and employers will be $151,900 and $39,800, respectively.