When preparing for open enrollment, HR professionals and employers often focus on selecting the right benefits. However, the method of offering these benefits—through passive or active enrollment—can significantly impact the outcome. So, what's the difference between passive and active enrollment, and which approach is best for your organization?
Passive enrollment, or auto-enrollment occurs when benefit elections from the previous period automatically roll over into the new enrollment period. This approach simplifies the process and ensures consistent benefits participation. It's particularly beneficial for reducing gaps in enrollment, which can lead to compliance issues.
However, passive enrollment has its drawbacks. Employees might not review their options thoroughly, potentially sticking with benefits that no longer suit their needs. This oversight could mean missing out on better coverage options.
Active enrollment is a process that requires employees to actively elect their benefits every enrollment period. Instead of automatically continuing the previous year's selections, employees must participate in the full enrollment process annually. While this demands more time and effort, it also encourages employees to engage with their benefits options.
Active enrollment can foster a stronger company culture by involving employees in the decision-making process. It also serves as an opportunity to educate employees about their benefits, reducing confusion throughout the year.
The best enrollment strategy depends on your organization's needs and your employees' preferences. A lot can change between enrollment periods, and previous benefit elections might no longer be suitable. For instance, changes in health insurance deductibles or the availability of certain benefits could impact employees' decisions.
With active enrollment, employees review and evaluate their past elections, current needs, and available options, ensuring they make informed decisions. While passive enrollment saves time during the enrollment period, active enrollment's engagement benefits often make it the better choice for most organizations.
Whether you opt for passive or active enrollment, an all-in-one human resources information system (HRIS) like BerniePortal can streamline the process. BerniePortal offers features for both auto-enrollment and active selection, simplifying benefits administration and improving communication.
You can stay informed, educated, and up-to-date with open enrollment, benefits administration, and other important topics using BerniePortal’s comprehensive resources: