It’s no secret that open enrollment is often the busiest time of the year for human resources and employee benefits professionals. From collaborating with your adviser and negotiating plan details to crafting employee communications and fielding employee questions, there’s no shortage of activity during OE.
While it can be tempting to take the easy route and simply put open enrollment on auto-pilot—aka passive enrollment—taking the time to implement an active open enrollment is well worth the effort.
But what is an active open enrollment? And how does it benefit HR? Simply put, it’s an employee benefits best practice.
Whether you’re new to active open enrollment as a strategy and want to know more about this approach or you’re currently using an active enrollment and want to learn how to maximize engagement, check out our handy guide to active benefits enrollment.
What is an Active Benefits Enrollment?
An active benefits enrollment is an enrollment style that requires employees to actively log in to the benefits enrollment system and actively select benefits. Prior year’s elections are not pre-loaded into the system, and if an employee fails to log in and select their benefits, they are not covered for the following plan year and may lose coverage.
Active enrollment is the alternative to a passive enrollment, where prior year benefit elections are pre-loaded into the benefits system and employees do not have to log in and make new elections. Employees do have the option to log in and make updates but are not required to do so and therefore will not lose coverage.
Why is an Active Open Enrollment an HR Best Practice?
Conducting an active benefits enrollment might seem like more work—but that’s not necessarily the case. And, even if it is a little more work communicating with and supporting employees through the process, the work is well worth the effort. Hear me out.
Requiring employees to actively log in to review and select their benefits provides a new opportunity to educate employees on their benefits options and to introduce new programs and perks. A recent MetLife study also revealed that employees who completed an active enrollment were more likely to elect voluntary benefits. Additionally, employees that actively select benefits are more likely to select benefits that are best suited to their current needs and to drop coverage and benefits they no longer need—which can save your company money in the long run.
Higher engagement + better data + accurate coverage = a better benefits experience
Pros and Cons of an Active Benefits Enrollment
Alright, now that we’ve quickly defined what an active enrollment strategy actually is, let’s break down a few of the pros and cons.
Pros of an Active Enrollment
- Active enrollment prompts employees to review and select benefits each year, which will help ensure that each employee’s benefit elections are tailored to their present situation
- Active enrollment gives HR an opportunity to educate their employees on any plan changes or new programs
- Active enrollment can help HR improve the integrity of employee data by having employees review and update during the enrollment process
- Employees that complete an active enrollment are more likely to select voluntary benefits
- An active enrollee is more likely to drop benefits and coverage they no longer need
- An active enrollment ensures that benefits which legally cannot be treated as passive are not overlooked (ex: FSA contributions)
- Prior year’s elections are not loaded into the benefits system, which can save valuable configuration time prior to open enrollment
Cons of an Active Enrollment
- An active enrollment can require more time and effort on employee communications to educate and nurture employees through the enrollment process
- Employees that do not log in and complete the enrollment process can lose their benefits and coverage for the following year
The benefits of an active enrollment are clear—better engaged and more informed employees, accurate employee data, and coverage levels that accurately reflect individual employee needs.
This is why performing an active benefits enrollment is considered a human resources best practice—and the data supports this!
According to a 2011 SHRM report, 71% of employers conducted a passive enrollment, while an updated report by JP Griffin found that 50% of employers are now in favor of an active enrollment. This represents a 20+% shift in strategies!
The tides are turning as employee engagement and cost control become more pressing human resources priorities and as employees seek a more personalized and flexible benefits experience.
5 Tips for Running a Successful Active Open Enrollment
Launching an active benefits enrollment might sound scary—but fret not. We’ve got a few tips, tricks, tools and best practices to you plan and launch a successful active enrollment.
1.) Complete a dependent audit prior to open enrollment. Another benefits best practice, a dependent audit will drive savings and maintain compliance by eliminating ineligible dependents from your health plans. Learn about your potential savings here.
2.) Have a complete communications plan in place. This plan should include several channels (email, print materials, text alerts, etc.) and include timely messages before, during and after open enrollment. Check out our free Open Enrollment Playbook for access to tools, template, timelines and more.
3.) Incorporate plenty of education into open enrollment. This includes everything from using educational videos to define basic benefits concepts to carving out time for one-on-one benefits consults for employees that need a little extra help.
4.) Invest in decision support tools. This could be a benefits enrollment platform with built-in decision support or a robust decision support tool like ALEX. Providing real-time assistance to employees when it matters most
5.) Ask employees to verify and update personal information. A quick prompt is all you need to get employees to check and update their data, which will help ensure your database is up-to-date and accurate.
Conducting an active open enrollment can seem daunting, but we’re here to help.
And, if an active enrollment sounds like a good fit but it’s too much work for your internal HR team, benefits outsourcing could be a great solution to support enrollment efforts.
Ready to Activate Your Benefits?
Switching from passive to active enrollment might seem like a daunting task—but we’re here to help! Schedule your complimentary consultation today to discuss.
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