Passive vs. Active Enrollment

 

When preparing for open enrollment, HR professionals and employers often focus on selecting the right benefits. However, the way these benefits are offered—through passive or active enrollment—can significantly impact employee engagement, satisfaction, and even compliance. Understanding the differences between these two approaches is essential for making the best choice for your organization.

 

What Is Passive Enrollment?

Passive enrollment, also known as auto-enrollment, allows employees’ previous benefit selections to roll over automatically into the new enrollment period. This method simplifies the process, ensuring continuity in benefits participation while reducing administrative burdens. Many organizations appreciate passive enrollment for its ability to minimize lapses in coverage and maintain compliance with benefits regulations.

Despite these advantages, passive enrollment has its drawbacks. Employees may not take the time to review their options carefully, potentially sticking with plans that no longer suit their needs. As a result, they might miss out on better coverage options, cost savings, or newly introduced benefits. Without a conscious decision-making process, employees could unknowingly continue with plans that are no longer the best fit for their circumstances.

What Is Active Enrollment?

Unlike passive enrollment, active enrollment requires employees to reselect their benefits each enrollment period. Instead of automatically continuing with the previous year’s choices, employees must actively engage in the decision-making process. While this approach requires more effort, it encourages employees to take a closer look at their benefits and explore all available options.

Active enrollment ensures that employees remain informed about their benefits, making choices that align with their current needs. By revisiting their options annually, employees can better assess how their health, financial situation, or family circumstances have changed. This process also provides an opportunity for employers to educate employees about plan updates, cost changes, and additional benefits that may be available. As a result, employees are more engaged and confident in their selections, reducing confusion throughout the year.

Preparing for Active Enrollment

To make the most of active enrollment, organizations should plan ahead to ensure a smooth and efficient process. Communication is key—employers should start educating employees about upcoming enrollment well in advance, providing clear information on available plans, changes from the previous year, and deadlines.

HR teams can enhance engagement by hosting informational sessions, offering one-on-one benefits counseling, and providing digital resources that explain coverage options in detail. Encouraging employees to assess their healthcare needs and financial priorities before making selections can lead to more informed decisions. Additionally, using an HRIS like BerniePortal can help streamline the process by offering an intuitive enrollment platform, automated reminders, and decision-support tools to guide employees in making the best choices for their individual situations.

For more tips on open enrollment communication, read our blog about open enrollment preparation here.

Understanding Qualifying Life Events

Employees should also be aware that outside of the open enrollment period, changes to benefit selections are typically only allowed if a qualifying life event occurs. A qualifying life event is a significant change in an individual's life that allows them to make adjustments to their benefits outside of the standard enrollment window. Common qualifying events include marriage, divorce, the birth or adoption of a child, loss of other health coverage, and significant changes in employment status.

Choosing the Right Strategy for Your Organization

Deciding between passive and active enrollment depends on your organization’s goals and workforce needs. If simplicity and efficiency are the top priorities, passive enrollment may be a practical choice, as it streamlines the process and prevents gaps in coverage. However, if engagement and informed decision-making are essential to your benefits strategy, active enrollment offers a more robust solution. This approach ensures that employees evaluate their needs regularly and make well-informed decisions regarding their benefits.

Organizations that frequently update their benefits offerings may find that active enrollment is the better option, as it encourages employees to stay up to date with new plans and cost adjustments. In contrast, companies with a more stable benefits structure might prefer passive enrollment to reduce administrative workload and keep the process as seamless as possible.

Additional Resources

You can stay informed, educated, and up to date with important HR topics using BerniePortal’s comprehensive resources:

• BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
• BerniePortal Blog—a one-stop shop for HR industry news
• HR Glossary—featuring the most common HR terms, acronyms, and compliance
• Resource Library—essential guides covering a comprehensive list of HR topics
• HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics
• Community—the HR Party of One Community forum, a place devoted to HR professionals to ask questions, learn more, and help others