Auto mode button ith this giantexpense per employee, shouldn't HR make sure to educate and drivebest practices and behavior to their most important asset, theirown employees? (Photo: Shutterstock)

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When HR wants to make open enrollment easy for employees andthemselves, data shows it comes with a pretty hefty price tag, butnot in a way you would suspect.

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Passive enrollment, today's "easy button," has always been afascinating concept for me, and for many years, a frustrating oneas well. As someone who has built a profession around voluntarybenefits, passive versus active enrollment was the differencebetween a serving a new client or walking away from one.

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Related: COVID-19 will reshape health benefits: Howemployers can prepare

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In my old life, when a client decided they wanted a passiveenrollment, that was my cue to gracefully bow out of anopportunity. Nothing stopped a conversation around employeeengagement and benefit education faster than the word "passive."The word in and of itself means lacking in energy and will and inthe context of complicated subject matter like employee benefits,the two should never coexist.

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Let me quickly define the difference between active and passive.Active enrollment is one where employees areobligated to review their benefits package and physically maketheir elections, whether or not they change from the year prior.Review, rethink, re-enroll. Passiveenrollment lets the elections roll year afteryear without consideration of one's current obligations.

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As a consultant on the broker side, I am ever fascinated by thechoice our clients make to have passive enrollments. As I look atthe entire picture, I think about the months-long process and themillions of dollars our client's spend on building competitivebenefits packages that are not only designed to recruit talent butjust as important, designed to retain it. I think about thevigorous and painful back and forth between our account managementteams, our carriers, and our clients to get these packages ascompetitive as possible. Countless 6 AM calls and10 PM emails, just to get it all right.

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And then, when it is all said and done, and we have finallypulled together a program that our clients are happy with, POOF,Open enrollment is passive. Every time that happens I scratch myhead and wonder: "NFP and this client just spent four months andcountless hours pulling together a program that costs $10,000to  $15,000 per employee and now neither one of us caresif employees spend any time at all on this stuff?"

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It's true; I think that very thought EVERY time. Why do any ofthis hard work, if in the end we are going to run out of gas andnot require employees to review their benefits and re-assess theirchoices? Things change, right? With this giant expense peremployee, shouldn't HR make sure to educate and drive bestpractices and behavior to their most important asset, their ownemployees?

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Let's take a look at the price our clients really pay when theygo down the passive enrollment route.

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A study conducted by the IFEBP found that 50% of employees aredissatisfied with their benefit packages while 22% of employeesleave their jobs because they don't think their benefits are anygood.

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(But didn't our clients spend hours and hours and hours andmillions of dollars building benefit programs meant to recruit andretain their employees and not lose them?)

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A recent study by Benefitfocus across 476 employers and 4million employees found that if an employer made a differentdecision and required an active enrollment there is roughly a 37%decrease in employee turnover as a result of active participation(and year round engagement) in benefit enrollment.

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Let's monetize what this all means to our clients. According toThe Work Institute 2019 Retention Report the estimated cost to losea U.S. worker is $15,000. So for every 1,000 employees, 80 could besaved from turning over to the tune of $1,200,000 simply by makingOpen Enrollment active.

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For me the choice is clear. An active enrollment seems a smallprice to pay when so much is at stake. The question now is, how dowe convince ourselves and our clients that Active enrollment is theright choice for everybody?

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Kim Heald is voluntary benefits practiceleader at NFP.

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