Employee Benefit Views

Passive benefits enrollment is ‘risky practice,’ expert says

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Posted August 3, 2011 by By Kelley M. Butler at 01:42PM. Comments (39)

According to a new survey from HighRoads, across employers ranging in size from fewer than 5,000 employees to more than 100,000 employees, 71% of respondents conduct “passive” versus “active” benefits enrollment, thus enabling employees to automatically renew most of their own plans.

It’s no wonder that benefits pros want to leave something “passive” during enrollment season, since they do the lion’s share of the “active” preparation. HighRoads finds that 97% of practitioners say open enrollment consumes at least 50% of their time.

However, a hands-off enrollment may not be the best way to go, says Kim Buckey, HighRoads practice lead. “While on the face of it, passive enrollment is easier for both employees and employers, since employees can just ‘roll over’ their current elections, except for flexible spending accounts. But that can be a risky practice,” she warns. “If participants can renew their coverage without truly examining their elections, they may end up with coverage that doesn't truly meet their needs, or that will cost them more than they can truly afford.”

In other words: Although I’m sure you can think of a million ways you’d rather spend the fall months than chasing after employees who wait until the last minute to complete an active enrollment, you know what they say about things that sound too good to be true.

“It is critical that employees carefully review their plan open enrollment materials each year, particularly in light of health-care reform and changes their employers are making to be in compliance,” says Mary Andersen, founder of ERISA Diagnostics, Inc. “Those changes might be additional coverage possibilities, such as covering children up to age 26, or it could be new limits in coverage related to spending accounts. Either way, employees need to understand their options and take responsibility for their own benefit choices.”

Does your company conduct an active or passive benefits enrollment? What are your reasons and strategies to make that option successful? Share your thoughts in the comments.

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Posted by: Diane M | August 4, 2011 3:33 PM

My 600 employees are scattered amoung 55 job sites with about 125 at our home office. We pay to have an enrollment company come out and do face-to-face enrollments as well as offer online enrollments. We always do active enrollments because of our high turnover rate. And the majority of our employees are young, many who have never enrolled in insurance on their own before.

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Posted by: Santiago L | August 4, 2011 3:04 PM

In the non-profit small-group market, in which I mostly work, employers tend to be pretty much on a wavelength with their employees, and employees tend to take an active interest in their benefits. There are usually only a couple of choices, and when there are new alternatives, there is typically a group enrollment meeting. Moreover, a choice (say, between a low and a high deductible) is a bit of a throw of the dice- who really knows what his/her health care costs will be?

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