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Monday, 21 June 2021 11:09

Communicating About Open Enrollment: Active vs. Passive

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Every year, employees have a brief window in which they can sign up, cancel, or alter the terms of their existing health insurance policy. This is known as the open enrollment period, and at many companies it also provides employees with the opportunity to sign up for life insurance and other benefits.

One of the central responsibilities of HR is to communicate with employees about the open enrollment period. This means more than just making a perfunctory announcement. It also means properly educating employees about the benefits available and about how they can take advantage of them. And it means opening a dialogue to address any questions or concerns.

As your HR team contemplates different ways to communicate with employees, there are two main options to consider: Active vs. passive. Both options come with their own pros and cons, and deciding between the two is a crucial step in keeping your employees properly engaged in the benefits process.

Active Enrollment Communication

With active enrollment communication, employees do not have the option of automatically continuing their benefits from the previous year; instead, they must actually review the options and make a decision about the plan they wish to have for the coming year (even if it does end up being identical to their plan from last year).

As you can imagine, this is an effective way to get employees more engaged in benefits selection, and to essentially force them to become educated about the different options. In years when there are a lot of major changes to the available benefits packages, active enrollment communication can be highly advantageous.

The biggest downside? There is a major onus on HR to properly communicate exactly what employees need to do to choose their benefits. And for employees, there may be steep consequences for not acting. For example, employees who do not enroll in a plan may have their coverage dropped altogether.

The primary pros of active enrollment communication:

  • It requires employees to consider their options.
  • It provides HR with a great opportunity to educate employees about their benefits.
  • It coaxes employees to discontinue benefits they no longer need.
  • It creates a chance to collect/update important employee data, such as life insurance beneficiaries and emergency contacts.
  • It prevents certain benefits, like Flexible Spending Arrangement (FSA) or Health Savings Accounts (HSA) employee paycheck contributions, from being overlooked.
  • It mitigates liability to the business owner by having a valid enrollment or waiver for benefits by every employee.

Meanwhile, the biggest cons include:

  • Some employees may be overwhelmed by the sheer volume of information being thrown at them.
  • The employee may be on vacation and must make special arrangements to complete the Open Enrollment in the time/dates allotted.
  • Active enrollment communication requires a lot of effort and may be tough without input from third parties.

Passive Enrollment Communication

With passive enrollment, employees are automatically re-enrolled in benefits based on selections they made in the past; this is the easier of the two options, and as such, it’s quite a bit more common than active enrollment communication.

The benefits are mostly pretty obvious: There is a much lighter administrative burden. Employees will not lose their benefits simply by failing to act or by forgetting to re-enroll. It’s more convenient for everyone involved.

However, there can also be some drawbacks. For example, as this is the only time during the year when coverage for many benefit options may be changed, it is incumbent on the employee to reach out and request assistance to assure changes occur during the window of opportunity, employees may not make fully informed decisions about the different benefits available. They may not take full advantage of the options available to them, which in turn can decrease their own satisfaction, engagement, and not utilize this essential protection for themselves and their family.

Also, because employees tend to be less informed about their benefits, many companies see more health problems among their workforce, more sick days, etc. This employee decision may result in higher employer Worker’s Compensation Insurance claims as employees find themselves without group benefits coverage as they wait to enroll in the next enrollment year.

Choosing How to Communicate About Open Enrollment

There is no question that passive enrollment communication is the easier approach, but that doesn’t necessarily make it the best. Active enrollment may result in a more engaged and informed workforce, and in better benefits utilization overall. As you weigh these options, we would love to offer our insight. Contact your licensed FullHR professionals to learn more.

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