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of U.S. employers opted for passive enrollment
of employees keep the same plan from year to year
This means they fail to actively educate and engage employees around their benefits options – which generally results in employees “rolling over” their previous elections, regardless of changes to their health needs or available offerings.
Without support from employers, employees aren’t equipped to make smart, cost-effective benefits decisions to cover their health care needs. To make the most of benefits investments – for both organizations and their employees – employers must commit to a more active approach.
Passive enrollment puts the onus on the employee to actively research and enroll in health plans.
However, because most of us avoid what we don’t understand, employees often aren’t motivated to do their own research or choose the right resources to learn about health care. According to DirectPath’s 2020 Consumer Survey Report, four in 10 consumer respondents educated themselves about health care using online resources, while others learned from a family member (18%) or friend or coworker (12%)—none of whom are likely to be benefits experts.
Without guidance to review and understand benefits options, employees are inclined to roll over plans year after year – which may be detrimental to their physical and financial health.
With passive enrollment, employers risk:
To avoid these issues, companies should practice active enrollment – requiring their employees to make an election in order to continue coverage into the next year. This encourages employees to examine their benefits options. Through an active approach to enrollment, employers can direct employees to more cost-effective plans, such as high deductible health plans, and can capture critical beneficiary and dependent information for audits and reporting. Employees, meanwhile, can learn about how their benefits work and choose the plan that matches their current family situation and needs.
To set themselves up for a successful active enrollment, employers should:
Take a strategic approach. Employers must map out a communications strategy that will reach all employees, from senior executives and entry-level employees to family members and COBRA beneficiaries.
Create Customized materials. Employees must also understand how to use the benefits they select based on their personal situation. 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. Benefits educators can provide meaningful and individualized conversations to help employees navigate the enrollment process, ensure consistent messaging and enhance employee understanding and appreciation of benefits.
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.