Health Insurance Navigator

By Lisa Zamosky

I recently received an email from a reader asking about a change in her employer’s open enrollment policy this year.

In years past, employees who didn’t make an active choice of health benefits for the following year automatically defaulted to the plan they already had. This year, her employer has changed the rules: Anyone who fails to actively sign up for health benefits will find themselves without coverage for 2013. Why are they doing this, she wanted to know?

I reached out to Helen Darling, president of the National Business Group on Health, to find out how common a policy this is among employers, and why companies would put this in place.

Encouraging an Active Role

According to Darling, this choose-it-or-lose-it policy is call “positive enrollment.”

“From time to time, employers decide that they think it is a good idea for employees to have to make an active choice of their health plan,” she says.

There are five main reasons Darling cites for employers requiring positive enrollment:

1. To encourage consumerism: When it comes to using your health benefits, employers want you to act and think like real consumers. “At the very least, [employees] need to review what is offered each year and make the best decisions for themselves and their families. Passive enrollment doesn’t accomplish that,” Darling says.
2. It’s not much to ask: The process of choosing health benefits through an employer is usually very simple, Darling says. Typically, all that’s required is checking a box on an electronic form or making a choice by phone. You’ll also need to indicate if you want your policy to cover your spouse and/or kids. “That is not a lot to ask for a benefit that on average costs the employer somewhere between $7,000 to $10,000 [a year],” Darling says.
3. It works: Research indicates that people are more committed if they make a choice and they are more likely to read the material about their choices and make a better decision.
4. To increase awareness:  Most employers make some changes to the benefits they offer employees every year, and they want to be sure employees understand those changes. According to Darling, when people understand the changes between this year’s benefits package and those offered for the upcoming year, they’re in a better position to make the best choice. You need to know what’s changed in order to make the best choice, Darling says.
5. To avoid surprises: “When employers make big changes, they will almost always require an active enrollment,” Darling says. “They don’t want their employees to be surprised so they do all they can to get them to pay attention.”

Does your employer require “positive enrollment?” What changes have you seen to your employer’s benefit package between 2012 and 2013? Share your comments below.