With the latest open enrollment behind you, you may think it’s too early to start evaluating enrollment strategies for next year. Think again.
Open enrollment is more than just deciding what benefits to offer. HR administrators need to evaluate how their employees will enroll in those benefits — specifically, whether they will choose active or passive enrollment. This decision has implications for how well your employees are covered, whether they understand their benefits, and how your organization communicates about benefits.
Planning ahead for benefits enrollment is especially helpful for employers that choose active enrollment because it gives them ample time to create and execute a communications strategy to educate employees about plan offerings and the need to make selections each year. Communications and awareness campaigns can start as early as six months ahead of enrollment. Employers that choose passive enrollment may not need as much time for planning, though they still need to convey the enrollment process and available benefits to employees.
So which enrollment option is best for your organization?
Passive enrollment is a more convenient option for employees in cases where a significant share of the workforce doesn’t have a company email alias. This scenario is common in industries that rely on production lines, for instance.
Passive enrollment is also a good option if employers are concerned about getting employees engaged enough to actively enroll.
In many cases, employees don’t have the motivation or incentive to research and actively enroll in benefits. For employers without the resources to invest in targeted education and messaging strategy, passive enrollment helps ensure employees still get the coverage they need.
According to a poll by the Kaiser Family Foundation, 44% of U.S. employees have a difficult time understanding what their medical plan covers and how much they will pay out of pocket. This lack of knowledge can affect whether or not employees use their benefits or if they use them correctly.
COVID-19 has made it even more critical for employees to have a full view of their current benefits — and where gaps in coverage may be. For instance, many employees now want to increase their coverage to include supplementary offerings, such as hospital indemnity or critical illness. But without a full view of their benefits, employees won’t know where any gaps in coverage are; thus, they won’t know whether they even need to add coverage. Active enrollment can help address these issues.
As employers close out one enrollment season and look ahead to another, they should make time to evaluate whether passive or active enrollment is the best option for their employees. Both options provide benefits, and there is no one “right” choice; rather, employers should choose based on what makes sense for their unique context. In some cases, that may even mean adopting a hybrid model. Making the decision now, however, enables organizations to better prepare for whichever path they choose and ensure their next open enrollment is even more successful.