For most HR and benefits professionals, open enrollment is the busiest time of year – which means that it's anything but passive. While a 2011 study reported that a majority of companies (71 percent) opt for passive enrollment, new regulatory requirements combined with rising healthcare costs have employers switching to active enrollment to actively engage employees in their benefits decisions. Passive enrollment allows employees to roll over their benefits from the previous year, without requiring them to assess their plan options or learn more about their benefits. Active enrollment requires employees to choose an enrollment plan, regardless of their coverage from the previous year.
While on the surface a passive enrollment might seem like the easier choice, it could lead to higher costs if employees don't select plans that fit their changing needs and don't understand how to use their benefits correctly. HR teams who choose a passive open enrollment also often miss the opportunity to build employee loyalty by highlighting the advantages of their company's benefits package.
Here are some key considerations when choosing between a passive and active enrollment:
Financial Impact of Benefits Decisions:
- 42 percent of employees estimate they waste up to $750 a year because of errors they make with their insurance benefits (Aflac)
- Consumer-directed health plans cost large employers 21% less than PPOs and 25% less than HMOs in 2014 (Mercer)
- Less than half of employees strongly agreed that their company’s benefit communications helped them to understand how much they would pay for specific services and effectively educated them on benefits. (Metlife)
- Employees who find their benefits communications effective are more than twice as likely to say they are very loyal to their company. (Metlife)
Recruitment & Retention:
- 78 percent of workers, including millennials, GenXers and boomers, base their acceptance or rejection of a job offer in part on the benefits package. (Unum)
- Employees who are very satisfied with their benefits are almost four times more likely to be very satisfied with their jobs. (Metlife)
Whether active or passive, download this free whitepaper to learn how you can make open enrollment a breeze for you and your employees.
Aflac: 2014 Aflac WorkForces Report
Unum: Benefits Buyers Study 2015
Mercer: Mercer's National Survey of Employer-Sponsored Health Plans 2014
Metlife: 2014 & 2015 Employee Benefit Trends Study