ROLLING OR "EVERGREEN" ELECTIONS

Rolling or Evergreen Elections – Automatic Benefits Continuation

In plain language: Rolling or Evergreen Elections in employee benefits refers to a process where an employee's benefits selections continue automatically year over year unless they choose to make changes.

Technical definition: Rolling or Evergreen elections, also sometimes referred to as passive enrollment, is an approach in benefits administration where employees' existing benefit elections are autopiloted into the next benefits plan year if no changes are made by the employee during the open enrollment period.

Many employees find the open enrollment period stressful, having to navigate complex benefits packages and make decisions about the upcoming year. Evergreen elections simplify this process through automatic continuation of benefits selections.

TL;DR

What Rolling or Evergreen Elections are (one simple sentence)

An automatic process in benefits administration where an employee’s existing benefits selections are continued into the next plan year, unless changed by the employee during the open enrollment period.

Why it matters in day-to-day agency work

Simplifies the open enrollment process, reduces administrative work related to annual re-enrollment, and helps maintain employees' benefits coverage.

One common pitfall or misunderstanding

Automatically rolling forward benefits selections can lead to people being enrolled in plans that no longer suit their needs if they fail to review their benefits during open enrollment.

One quick win or best practice for agencies

Increasing employee education about benefit options and the importance of reviewing choices during the open enrollment period to ensure employees make informed decisions.

What Is Rolling or Evergreen Elections in Insurance?

Rolling or Evergreen elections, within the context of insurance or employee benefits, is a methodology designed to simplify the perennial open enrollment process. The principle is that if an employee does not make any changes to their existing benefits durante the open enrollment window, their previous choices automatically roll over into the new plan year.

These elections are primarily associated with employee benefits plans, most notably, cafeteria plans under section 125. It enhances the agility and continuity of benefits administration by reducing administrative burdens associated with active enrollment, where employees have to make a conscious decision to maintain their existing benefits every year.

However, this concept doesn't apply universally; some elements of the benefits package, for instance, Flexible Spending Accounts (FSAs), require affirmative elections every year due to IRS regulations.

Furthermore, it's crucial for agencies to bear in mind that Rolling or Evergreen elections need to be properly communicated to the employees. Employees should know their enrolment deadlines and the specifics of their benefits elections to circumvent any enrollment errors or oversights.

Key Related Terms to Know

Passive Enrollment – When employees do not need to take action to continue their current coverage.

Active Enrollment – When employees need to make a conscious decision to maintain their existing benefits every year.

Open Enrollment Guide – A resource provided to employees outlining the benefits available to them, the enrollment window, and how to select or make changes to their coverage.

Employee Engagement – The level to which employees are actively involved in and enthusiastic about their work and workplace; in the context of benefits, how proactive they are in understanding and utilizing their benefits.

Employee Benefits – Compensation provided to employees over and above salary and wages; can include health insurance, retirement benefit, paid time off, and other perks.

Qualifying Life Events - Life circumstances like marriage, birth or adoption of a child, divorce etc., that may require changes to employees benefit elections outside open enrolment.

Cafeteria Plans – Also known as Section 125 plans, these allow employees to pay for certain benefits expenses with pre-tax dollars.

Common Questions About Rolling or Evergreen Elections

How does rolling or evergreen elections help in benefits administration?

Evergreen elections play a significant role in making benefits administration more efficient by reducing the administrative workloads tied to annual re-enrollments. By auto-enrolling employees in their previous year's plan, HR departments save time and resources that would have been expended on active participation. For example, if an employee fails to submit an affirmative election during the open enrollment period, automatic enrollment safeguards the employee from losing coverage.

Don't employees risk being tied to an unsuitable plan with rolling elections?

This could be a potential issue, emphasizing the need for adequate benefits education. Employees should be encouraged to review their options yearly, even with evergreen elections, to ensure their plan still suits their needs. Tools like open enrollment guides can be useful resources in this regard.

What happens when an employee wants to make changes after the enrollment deadline?

In general, once the open enrollment window closes, employees are locked into their elected plans until the next open enrollment. However, mid-year election changes could be permissible under IRS regulations if a qualifying life event occurs (marriage, birth of a child, divorce).

Are there restrictions to rolling elections?

Not all elements of a benefits package can have rolling elections. Flexible Spending Accounts (FSA), as an example, requires annual affirmative elections as per IRS regulations.

Rolling or Evergreen Elections vs. Active Enrollment

Active enrollment, in contrast with rolling or evergreen elections, requires an employee to affirmatively select their benefits each year during open enrollment. Importantly, failing to actively select a plan during active enrollment may result in loss of benefits for the forthcoming year.

Comparison Area	Rolling or Evergreen Elections	Active Enrollment
Primary use case	Ease of benefits administration and continuity of coverage	Provides full control to employees over their annual benefits selections
Enrollment type	Passive	Active
Typical exclusions	Cannot be used for Flexible Spending Accounts (FSAs)	Applied to all benefit plans
Who is most affected by errors	Employees, as they may unknowingly roll into unfit benefits coverage	Employees risk losing coverage if they miss the enrollment window
Common mistakes	Lack of annual review of benefits suitability	Missing the enrollment window and losing existing benefits

Real Claim Examples Involving Rolling or Evergreen elections

Scenario 1: An employee opted for evergreen elections. However, they failed to review their existing benefit elections during the open enrollment period and missed an important upgrade to their health plan. This resulted in the employee paying higher than necessary out-of-pocket costs for medical expenses the following year.

Scenario 2: A company introduced evergreen elections but did not adequately communicate this new enrollment practice to employees. Many employees assumed this meant their FSA funds would also roll over, which isn't allowed by IRS regulations. This resulted in confusion and dissatisfaction among employees when they discovered the leftover funds in their FSA did not carry forward.

Scenario 3: A new company moved from active to evergreen elections as part of their benefits administration changes. They did a comprehensive open enrollment education campaign, ensuring every employee understood what the changes meant. Due to this, the company saw an increase in employee engagement, a reduction in last-minute enrollment rush, enrollment errors, and importantly, employees' need for eleventh-hour support declined.

Limitations and Common Mistakes

Evergreen elections do not apply to benefits that require active re-enrollments such as Flexible Spending Accounts (FSAs).

Assuming that evergreen elections means "no-change" can lead to employees being locked into unsuitable plans.

Failure to provide adequate employee education and open enrollment communication can cause misunderstandings and dissatisfaction.

Misconceptions about qualifying life events and the ability to make mid-year election changes could result in employees missing significant benefit opportunities.

How to Explain Rolling or Evergreen Elections to Clients

Personal Lines client "Yeah, it's pretty simple. With evergreen elections, your current health plan will continue next year unless you tell us otherwise during open enrollment. Don't forget to still review your plan every year though, to make sure it still works for you."

Small Business owner "As an employer, one thing you could do to make yearly benefits easier on your team is introducing evergreen elections. This means their current elections roll forward to the next year unless they make changes. Remember, it's essential to communicate this well and remind them to review their benefit options each year."

CFO or Risk Manager "Evergreen, or rolling elections, can help streamline the benefits administration process by reducing the time spent on re-enrollments every year. It'll automatically continue employees' current elections if they don't take any action during open enrollment. However, keep in mind it doesn't apply to all plans like FSAs and ensure a strong communication strategy explains this process to employees."