Active VS Passive Enrollment – The Costs and Benefits of Each

If you are an employer who offers healthcare to your employees, you know that there is a timeframe called an open enrollment window. This window is for employees to use so they can adjust, renew or waive any of the benefits that they currently receive. Currently, laws require that employers offer an enrollment window to their employees. It is up to the employer as to whether that enrollment window is either passive or active. 

Passive VS Active – What’s the Difference?

Passive enrollment is defined as a period where the benefits an employee received the previous plan year just roll over into the next one. Similar plan options transfer automatically, and not too many things change unless an employee requests changes to their plan or an employer makes the decision to change company benefit policy. The active enrollment period is defined as one that requires an employee to actively renew their plan, request adjustments and in some cases, decline options that they aren’t interested in.  

According to a recent study from JP Griffin Group, about half of employees reported that their employer offered a passive enrollment period. This has changed since 2011, when about 70 percent of employees reported that their employers offered passive enrollment. This means that about 20 percent of employers elected to go with active enrollment instead of passive over the course of the last ten years or so. 

Affordable Care Act Makes a Lasting Impact

This significant change is likely due to the fact that interest in healthcare products for consumers has increased since the adoption of the Affordable Care Act. Since that regulation was passed, both employers and employees see to have been paying close attention to their healthcare coverage and what they offer to their employees.

Which Enrollment Type is Best for Your Business?

So which will be better for your business? And what about your employees? According to the above study, it is about half and half when it comes to the opinions of employees. However, when you ask employers, that changes. Currently, most employers tend to favor a passive enrollment period. The reason is, there is less paperwork, less man hours and resources needed to answer questions and address concerns employees might have regarding their plan, and so on. 

If you’re like most business owners, you’d probably opt to have a passive enrollment system, rather than an active one, because it’s easier. However, employee benefits are a selling point to attract new talent. For this reason, maybe you would choose to offer an active enrollment, if you have fewer employees and they are interested in adjusting, actively renewing or occasionally declining their healthcare plan. 

Trust the Professionals

If you have any questions about how passive or active enrollment will impact your stop loss for your self-funded business healthcare plan, or if you are interested in enrolling in stop loss insurance, give us a call, and we would be happy to help. At Prodigy, our knowledgeable and experienced stop loss professionals take pride in reducing the sometimes confusing healthcare jargon and breaking things down for business owners – while recommending the best type of stop-loss product for your business.

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