New Year, New Benefits: 7 Tips for Navigating New Hires and Midyear Changes

Angela Surra

Angela Surra

According to the US Chamber of Commerce, 40% of small business owners plan to add staff in 2024. We also know that some employees will experience life events during the plan year. New employees and employee life events mean additional employer responsibilities, and it’s important for small and midsized businesses to be prepared as these changes can have big effects on benefits programs. Mineral offers these seven tips to help surf the wave of newly eligible employees while staying on the crest of HR compliance.

1. Remember required notices for newly eligible employees.

During the initial enrollment process, newly eligible employees need to receive additional notices, such as the COBRA General Notice and the Department of Labor (DOL) Exchange Notice. The COBRA General Notice outlines continuation coverage rights under the Consolidated Omnibus Budget Reconciliation Act, while the DOL Exchange Notice informs employees about health coverage options through the Health Insurance Marketplace.

2. Maintain consistency in waiting periods.

Maintaining consistency in waiting periods for benefits eligibility is crucial to comply with applicable laws and ensure fairness and equality among employees. Employers should review and align waiting periods with other similarly situated employees to foster a positive and nondiscriminatory work environment.

3. Evaluate affordability.

Affordability is a key consideration in medical plans for new employees. Employers must assess whether available medical plans align with the financial capabilities of their workforce and comply with Affordable Care Act (ACA) requirements. For 2024, the IRS has set the affordability threshold at 8.39% of an employee’s income as the maximum contribution toward employee-only health coverage , emphasizing the importance of offering coverage that is financially feasible for employees and compliant with the employer mandate.

4. Tailor benefits packages.

Understanding the needs and preferences of new hires is paramount in tailoring benefits packages that attract and retain top talent. Conducting market research and surveys helps identify desired benefits, ensuring that the package aligns with the expectations of the workforce. This proactive approach not only enhances employee satisfaction but also establishes a competitive advantage in the talent market.

5. Communicate HIPAA special enrollment rights.

The Health Insurance Portability and Accountability Act (HIPAA) special enrollment rights provisions allow employees to modify their benefits in response to significant life events, such

as marriage or the birth of a child. Employers play a vital role in communicating these rights and supporting employees through the various stages of life.

6. Consider flexibility in adopting Section 125 election changes.

Section 125 of the Internal Revenue Code governing cafeteria plans permits employers to allow certain midyear election changes for qualifying events. While not mandatory, employers can provide flexibility by adopting IRS-permitted changes, allowing employees to adjust pre-tax benefit elections outside of the open enrollment period.

7. Uphold Family and Medical Leave Act (FMLA) protections.

Understanding benefits and job protection during FMLA leave is crucial for both employers and employees. The FMLA provides eligible employees with up to 12 weeks of unpaid, job-protected leave for specific family and medical reasons. During FMLA leave, employees maintain the same level of benefits at the same cost as if they were actively working.

By prioritizing clarity, communication, and compliance, organizations can create a comprehensive benefits program that meets the diverse needs of both the business and its employees—whether they join a company in the new year or experience a life event. This strategic approach not only attracts and retains top talent but also fosters a positive work environment where employees feel supported throughout their employment journey.

Author: Angela Surra
Angela Surra, CIC, CISR, SHRM-CP is a Principal Benefits Expert at Mineral by Mitratech.