HR.com: Active Enrollment Provides Significant Advantages: Employers and Employees Benefit From Regular Revision
More than ever, consumers demand choices and exert influence. Whether it’s seven coffee flavors, nine vehicle colors or 17 magazines about home decorating, there’s an expectation of individual preferences related to the choices in the modern marketplace.
Along those lines, you’d think most people would prefer to take an active approach to decision-making with something as important as their health care benefit coverage.
However, trends seem to indicate otherwise. As recently as five years ago, a whopping 71% of U.S. employers opted for passive enrollment (letting employees automatically roll over their previous elections), according to a compliance study conducted by DirectPath. Last year, an analysis of open enrollment practices by Aflac showed that 90% of employees keep the same plan from year to year.
With the growth of active enrollment, less employers and employees are just going to “let it ride,” resulting in a variety of advantages for both.
Problems with Passive Enrollment
At first glance, passive enrollment appears easier for everyone. Employees only have to check a box on a form to stay covered or may not have to take any action at all. Employers have less paperwork and reduced admin costs, especially if the plans only have minor changes.
However, employees (and their family members) can’t act like consumers until they understand what they’re buying and what they’re going to get for their money. Health care cost issues won’t be solved until employers ensure employees are educated and informed about how to choose a benefits package that’s right for them and how to use what they choose. (42% of employees estimate they waste up to $750 per year because of errors they make with their benefits, according to the 2014 Workforces Report published by Aflac.)
Many employees don’t have the information they need to make good decisions, and aren’t likely to seek it out on their own. Instead of researching benefit options, Americans would rather spend their time doing some typically undesirable tasks, based on the findings of an Aflac report that generated a lot of attention last year. 38% would rather clean out their email boxes, 23% would rather clean their toilets and 18% would rather do their taxes.
There’s more bad news from a Harris Poll conducted on behalf of Collective Health in December 2015: When it comes to researching options, nearly 80% of Americans spend less than an hour and 50% spend less than 30 minutes. Research studies conducted by health.gov find that individuals with limited health literacy skills are more likely to skip important preventive measures such as mammograms, Pap smears, and flu shots; are more likely to have chronic conditions and are less able to manage them effectively; and make greater use of services designed to treat complications of disease and less use of services designed to prevent complications.In addition, the longer employees go without having to actively review and learn about their benefits coverage, the less likely they are to understand how to make good decisions about that coverage or how to use it.
Active enrollment benefits both employers and employees. Employers are better able to direct employees to more cost-effective options, such as high-deductible plans. They can also capture critical beneficiary and dependent information for audits and Employer Shared Responsibility Reporting. Employees have the opportunity to understand how their benefits work, including how much their choices will cost them out-of-pocket during the year, so they can choose the plan that best matches their current situation and needs.
To manage active enrollment in a way that maximizes its benefits, good communication between HR and employees is critical, both during open enrollment and throughout the year. Here are some elements of a successful communications strategy:
A Strategic Approach. Be sure it maps out a plan of communications that will reach all interested parties, from senior executives and entry-level employees to family members and COBRA beneficiaries. You should be able to clearly understand who will receive communications, the information they will contain, when the communication will occur, the method of communication and why each step in the plan is important.
Customized Materials. Good benefits communication doesn’t start and stop at enrollment. While the key to active enrollment is preparing employees to make educated decisions about their choices, they must also understand how to use the benefits they select. Customized enrollment guides, newsletters, training materials and companion compliance materials should be prepared, including summary plan descriptions (SPDs), summaries of benefits and coverage (SBCs) and other legal notices.
One-on-One Enrollment Support. This helps to clarify each individual situation and expedites the benefits education process. Benefit educators should provide meaningful and individualized conversations to help your employees navigate the enrollment process, ensure consistent messaging and enhance employee understanding and appreciation of benefits. Your employees should be able to set up onsite or remote appointments with benefit educators fully trained on your package and able to enroll employees in the plans and programs that best suit their needs.
Employers have a large opportunity to engage their employees in benefits education. In a Kaiser Family Foundation report, a staggering 82% of employees say they are interested in knowing more about their benefits and how they work; encouragingly, four out of five employees view their employers as a trustworthy source of benefits information. Additionally, this process has an upside beyond just health insurance: an annual MetLife study of U.S. employee benefit trends found that employees who are very satisfied with benefits are more likely to be satisfied with their jobs than those who are not satisfied with their benefits. In fact, employees who are very satisfied with their benefits are almost four times more likely to be very satisfied with their jobs.
Active enrollment offers tremendous advantages for employers and employees. From cost savings and effective onboarding to increased education and higher participation in optional offerings, active enrollment optimizes the process and engages the workforce in benefits decision-making. Welcome to the next era of benefits enrollment.
Read full article here.
(Bart Yancey is the co-founder and CEO of DirectPath. Since 2004, he has led its growth into one of the top strategic employee engagement and health care compliance companies for Fortune 1000 employers. An industry leader in employee education and benefits communication, Bart was appointed to serve on the Alabama Health Insurance Exchange Study Commission by Governor Robert Bentley.)