Every benefits decision maker is faced with this question each year: Should we make annual enrollment an active or passive process? Before we look at each option, let’s define them:
- Active enrollment requires every benefit eligible employee to review and re-elect each plan offered to them by the organization.
- Passive enrollment means employees only have to do something if they want to make changes to their plans (except for those contributory plans like FSA and HSA that must be re-elected each year).
Deciding which you’re going to use is one of the first and most important decisions you must make because all of your planning is based on the decision, no matter what enrollment tool you use. It drives how you set up your enrollment system, how you communicate to your employees, and how you track the receipt of enrollment forms. Don’t take it lightly.
Here are things about each option that could help you make your decision.
Active
- Employee is reminded of every benefit offered by the company and can utilize plans they did not enroll in previously
- Higher effort required (and possible confusion) by the employee to re-elect every plan
- Employees could lose coverage if they do not complete their enrollments
- Employees become more comfortable with self-service if you use an enrollment system
- Employers can feel comfortable that their employees are well informed about their benefit offering
- Employers could see higher utilization numbers
- More stress on the enrollment system (if applicable)
- Larger administrative effort with things like password resets, form tracking and processing, etc.
- Consistent with a consumerism strategy
Passive
- Employee could lose out on valuable benefits they may need because they were not aware of them
- Less effort required (and possible confusion) by the employee
- Employee keep the coverages they have because they roll over (except for the contributory plans like FSA and HSA)
- Employees lose out on the self-service experience if you use an enrollment system
- Employers cannot be sure that their employees are fully utilizing the benefits they offer them
- Employers could see lower utilization numbers
- Fewer concerns about the stress levels on the enrollment system (if applicable)
- Lower administrative effort with things like password resets, form tracking/processing, etc.
- Inconsistent with a consumerism strategy
A Hybrid Approach
Depending on your administrator’s capabilities, you may be able to use a combination of these two. You can start with the Active approach and have your employees review and re-elect every plan. Then, at the end of your enrollment period, your administrator may be able to “roll-over” the previous year’s elections for those employees’ who didn’t enroll during the period. Check with your administrator to see if this is an option for you.
No matter what you decide, it is very important that you thoroughly think through your decision and stick with it throughout the project. Changing this decision half way through your planning period could impact a number of areas and possibly even your Annual Enrollment dates.
Good luck with your decision and have a GREAT Annual Enrollment!