Statistics from HighRoads' latest industry survey on open enrollment reveals 71 percent of respondents conduct passive versus active enrollment practices, therefore enabling employees to automatically renew most of their own plans.
"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), that can be a risky practice," says Kim Buckey, SPD Practice Lead, HighRoads.
If participants renew their coverage without truly examining options, they may end up with coverage that doesn't meet their needs or costs them more than they can afford, she says. It's also important for SPDs—a federally required summary of plan benefits that must be distributed to employees, retirees and beneficiaries—to be updated to reflect any changes to offered benefits.
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Active enrollment requires employees to make a proactive plan choice each open enrollment period. It encourages employees to take a look at their SPDs and review any plan changes. Employees who don't take action are penalized, typically by a default enrollment in either the option with the most basic coverage, or to no coverage at all.
"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.
Challenges of enrollment
One of the challenges, experts say, is getting employees to read annual enrollment materials. The HighRoads survey shows 65 percent of employers are using a variety of tactics to reach employees, including mail, email and face-to-face communication.
"Good communication is absolutely key to making sure employees understand any changes to their benefit plan, and evaluate whether they should switch plans during the open enrollment season," Buckey says.
To encourage readership, employers are stepping up their packaging of enrollment materials. The majority of respondents—62 percent—are branding their enrollment material.
"Employers want to deliver messages relating to the value of the benefits they provide and the need for employees to make informed decisions. Branding serves as a recognizable sign of commitment and expectation. It's a focused message to employees that explains why their company is the preferable place of employment," Buckey says.
Additionally, employees are overwhelmingly using electronic submissions to make their open enrollment choices. Some 73 percent of respondents say employees submit enrollments electronically, and only 13 percent use paper exclusively as an enrollment method. Those using paper enrollment are most often smaller employers with fewer than 5,000 employees.
A time commitment
The survey also looked at open enrollment preparation lead times on the part of employers. It found 59 percent of respondents start three to seven months ahead in developing open enrollment content while another 41 percent begin the process eight months to a year ahead.
For the most part, larger employers with more than 5,000 employees are taking the longest lead time—eight months to a year—to prepare for open enrollment. Some 60 percent of surveyed companies in the 100,000 and up employee range say they took eight to 11 months to prepare. In the smaller company category (fewer than 5,000 employees), 74 percent say they started to prepare three to seven months ahead.
Despite the increased complexity of health benefits plans and regulations, HighRoads found most respondents appear to be tackling open enrollment in house. Some 63 percent indicate they do not use an enrollment company or a vendor to support enrollment functions.
Working on enrollment is a significant time commitment, with 97 percent of respondents reporting that open enrollment consumes at least 50 percent of their time. Not surprisingly, 41 percent of respondents indicate that time constraints are the biggest challenge in preparing for open enrollment. Cost and drafting content account for 47 percent of respondents' challenges.
"Employers' commitment to the open enrollment process isn't likely to lessen, given the legislative landscape," Buckey says.
HighRoads conducted the survey to gauge how employers plan, execute and deliver open enrollment communication materials to employees. Respondents ranged in size from fewer than 5,000 employees to more than 100,000 employees. The majority of respondents have more than 5,000 employees.
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