For some small businesses, the annual open enrollment period is filled with 
complexities, paperwork, overwork and fretting. It’s one more reason that many businesses are putting the control — and responsibility — of health insurance in the hands of their employees.
Open enrollment — this year from Nov. 1, 2015 to Jan. 31, 2016 — is the window of time during which individuals are able to access the Health Insurance Marketplace and select coverage. Those who miss the enrollment period cannot purchase a plan unless there are special circumstances, such as a change in family status or loss of other health coverage.
For many small businesses and their employees, open enrollment is a time — and money — saving experience because of Defined Contribution Health Plans. During the traditionally high-stress open enrollment season, a Defined Contribution Health Plan is a strategy that ticks all the important boxes, including budget, efficiency and fairness.
Budget
Among highly valued factors in small business health insurance plans, cost is kind of a no-brainer. Companies need every advantage they can get in the constant battle to stay lean and nimble. At the same time, existing and potential employees must consider the substantial impact that cost of medical, dental and eye insurance will have on their paychecks.
With Defined Contribution Health Plans, employers save money by avoiding the escalating costs of group insurance plans; instead, individual team members choose coverage on the private healthcare exchange — during open enrollment — based on their specific needs.
In this model, the financial benefits are two-fold:
- Employees benefit from tax-free insurance reimbursements — at a fixed dollar amount — that they choose how to spend.
- These contributions are tax-deductible for the employer.
Efficiency
Using a defined contribution software platform enables small business owners to easily manage benefits online — usually a much quicker process than dealing with large group health insurance vendors.
An employee at a businesses that offers Defined Contribution Health Plans enjoys the freedom of setting up an insurance plan exactly the way he or she wants it, which takes a bit of research initially but also reduces the amount of time spent wading through benefit manuals. In companies with group insurance plans, people usually are expected to navigate through enormous packets that may or may not even apply to their unique needs.
Fairness
Real-dollar contributions to and customization of health insurance are important boons for attracting and retaining talented staff members.
Tax-free medical reimbursements are an innovative benefit for employees and their families. Additionally, individual health insurance plans cost 20 to 60 percent less than comparable group health coverage. It’s a win-win situation.
Beyond money savings, Defined Contribution Health Plans also provide the type of personalized service that is so valued in modern-day culture. People want and deserve right-sized insurance that fits their situation, which likely will change from year to year — along with their personally selected insurance coverage.
Conclusion
With Defined Contribution Health Plans, individuals and small businesses benefit from open enrollment rather than worrying about it.
What questions do you have about open enrollment? Ask us in a comment below.
