Open enrollment may be one of the more hectic times of the year for HR professionals. Data must be collected, plans must be set up, employees must make a choice, and it all is coordinated by a single department, sometimes a single person. The lasting effects put it at the top of many HR professionals’ priority lists—right next to offering the best benefits.
While planning open enrollment is an extensive and time-consuming process with many steps, it all starts with a single choice: Will you plan an active enrollment or passive enrollment? But before you weigh the pros and cons, choose the right fit, and start offering employees a great benefits package, here’s what you need to know to make the right decision on enrollment for your company.
What is the difference?
Passive enrollment is exactly that—passive. The system is set up to allow employees to re-enroll in the benefits selections they chose the year before. There is no additional learning, decision-making, or reading required. With a touch of a button, they are enrolled for the next year without exposure to any updates or other available options.
Active enrollment is, well, active! Employees are prompted to acknowledge a variety of choices when it comes to the benefits plans and options for the following year. By restricting their ability to automatically enroll in the same plan as last year, employees are pushed to educate themselves and understand how their choices affect them personally and financially.
Passive enrollment is an attractive option. It enables you to take an already established framework from the previous year and reapply it. Chances are your company has leaned towards this decision in the past, seeing that it offers simplicity to an already complex and tedious endeavor.
But while the ease of passive enrollment often sways employers to choose a passive strategy, the recent focus on wellness and healthcare has brought with it an emphasis on the open enrollment decision-making. Employers shouldn’t let their employees sit back, disengage, and let precedence choose for them anymore—and here’s why.
A transition period
Employee benefits is in a transition period. There’s the high costs of healthcare pushing employers to adjust plans, mobile technology changing the way employees access care, and the ACA prompting new strategies to keep employers compliant. These transitions also mean that from year to year, an employer’s health plan offerings could look different.
Depending on the employee, there could be a number of reasons for a plan change. First is the potential for cost-savings. To manage high healthcare costs, a number of employers are turning to Consumer-Directed Health Plans paired with Health Savings Accounts. The dual plan lowers overall costs for an employer, and provides lower monthly premiums for the employee—but only if they know it’s an option.
CDHPs and HSAs aren’t the only changes employers are making to their benefits plans. Other adjustments include implementing telehealth, exploring alternative funding, or coordinating wellness programs.
With a new look of health plans, employees should be re-assessing each year to make sure the program they choose is still the best fit for their situation—and an active enrollment strategy will help them navigate their options. For instance, a single employee in her early 30s might be better suited for the new HSA option instead of the PPO she was enrolled in last year.
Active enrollment will also help employees choose the best benefits in the long run. New trends in health plans will likely be phased in gradually, and employees need to be informed with each new addition. Telehealth won’t be effective at lowering costs if no one uses it, and weekly yoga classes are useless without students. An active enrollment will make sure employees are aware of the cost-saving add-ons available to them as they are implemented.
A better fit
Every aspect of benefits is a moving target, especially your employees. It’s a diverse workforce, and that means it’s going to be a diverse choice of benefits: some employees have families, others are now pregnant, some are single and healthy, others have chronic conditions. It all leads to differing situations and requires attention to the details of your plans.
“With active enrollment, you’re forcing employees to go in and make decisions each year,” said Ben Koubek, Namely’s Senior Benefits Consultant. “It’s a chance to dig into details and drive enrollment into the areas that properly fit the needs of each individual employee.”
Maybe one year, that 30-year-old single employee got married. Before then, she would have never opted for short term disability, but that same year, a colleague took maternity leave. “When open enrollment time comes around, an active strategy pushes her to think, ‘maybe I’ll need it and should take it too,” Koubek said. “It increases the level of employee responsibility.”
Things come up and year-to-year snapshots of an employee’s health needs will change. Implementing an active enrollment pushes employees to look back at the past year and take their health trends into consideration, making them better prepared for their future health needs.
An Employee Engagement Tool
Good benefits packages lead to loyal and happy employees, plus high talent attraction. Our #HRWins survey found that 54.3% of respondents chose core benefits—health insurance and PTO—as the perk or benefit that contributes most to the feeling of engagement. Great benefits mean happy employees and an attractive company to work for, but only if you provide the education.
A 2013 SHRM survey found that only 30% of workers who said the benefits education they received was fair or poor rated their employer as excellent or very good. Benefits education and employee satisfaction go hand in hand, and an active enrollment guarantees that education—and the satisfaction that comes with it.
“Most employees, still to this day, think of their coverage based on the carrier, not the plan,” said Koubek. “By properly educating employees, you show them what you are truly giving them in terms of benefits and cost.”
The process of informing your employees includes trainings, one-pagers, power points, Rx lists, etc. Trainings should include a step-by-step explanation through every available option—from start to finish—and what choosing each option will mean for the next year. Provide deeper-dives into new benefits with one-pagers, explain definitions, and run through different scenarios with a diverse group of sample (fictional) employees.
Great benefits are good for everyone: they will help your employees stay healthy, attract and retain talent, and keep benefits a relevant part of the total rewards package. But helping your employees choose their best fit can’t be automated. It’s time to change the plan from sitting back to taking action. Anyway, doctors suggest an active lifestyle to stay healthy, why not apply that same advice to open enrollment?