Open Enrollment for Health Insurance - 53% of Employees Regret Decision

Hello, this is Dr. Eric Bricker, and thank you for watching A Health Care Z. Today's topic is open enrollment for health insurance. 53% of employees actually regret the choice that they made during open enrollment. Now, I'm wearing a blue shirt today because you, one of the viewers, asked me, hey, Dr. Bricker, why don't you wear something else other than a white shirt and tie? So I just want you to know, look, I'm responsive to you people. Okay, open enrollment, Equitable, the company did a survey and they found that 53% of people actually regretted their open enrollment choice. More than half regretted their open enrollment choice. And then they asked them, why did you regret your decision? 25% of people regretted their decision for open enrollment because they failed to make changes for their lifestyle. So during open enrollment, obviously you're choosing your medical insurance and your dental and your vision and maybe short-term disability and long-term disability and group life. So your life situation changes. Maybe you wanted to move from an HMO to a PPO, from a high deductible plan to a PPO or vice versa. There's all sorts of choices to make and you didn't make them because you failed to make a change. Okay, two, 20% of people forgot. Okay, and we're going to get to that in a minute. 19% of people did not understand their options. And so after they made their choice and they actually found out what their choice meant, they're like, oh, well, I regret that. Which brings us to the next point, which is the issue of active versus passive open enrollment. So an active open enrollment is when typically during the fall for the next plan year, which typically starts on January 1st, then each of the employees needs to make a decision to pick a particular medical plan or a dental plan or a vision plan. And if they don't make a choice, they will not be put on the health insurance or the dental insurance or the vision insurance, as opposed to a passive enrollment, which just says, hey, look, employees, if you do nothing, you're just going to automatically be put on whatever choices you made last year. Those choices are going to continue on for next year. So if you chose this particular medical plan and this particular dental plan and this particular vision plan, if you do nothing, then you will automatically stay on those plans for the next year. And believe it or not, there's been a survey about that as well, which showed that about 50% of plans in America through employers have active enrollments where the employees actually have to make a choice every year, otherwise they're not going to get the benefits, and 50% of employers actually do a passive enrollment. Now, notice that is somewhat of a change because about 10, 15 years ago, believe it or not, only 30% of plans were active and 70% were passive. So it used to be that the majority of open enrollments were passive, and now it's 50-50. Okay, so as you can imagine, there's pros and cons to both active and passive enrollments. Okay, so let's go through the benefits of an active open enrollment where the employees actually have to make a choice. Okay, one, they can identify the best fit for their lifestyle. Okay, so this gets us to, okay, so for the 25 people who failed to make a change for their lifestyle and 20% of the people who forgot, guess what? They probably had passive enrollments. They probably just didn't do anything, and as a result, they just were automatically put through. Now, for the 25% that they failed to make a change for their lifestyle, they probably had passive, and then for the 20% that forgot, they might have been on an active plan, and so they regretted their benefit choice because they got dropped from the benefits because they just forgot to do something. Okay, so if it's active, then they can say, okay, now my lifestyle has changed, so maybe I need a higher deductible or a low deductible, or maybe last year I didn't need dental and this year I do need dental. Okay, now two, active enrollments give employers an opportunity to educate the employees around changes in the plan, so if there's additional benefits like an on-site, near-site clinic, like telemedicine, like a navigation service, like a new plan option that you're adding, that if you do a passive enrollment, then it is highly unlikely that the majority of your employees will even notice that that change happened to your plan. Okay, next up, the employees can drop benefits that they no longer want, so a lot of times this will be for what are called worksite or critical illness benefits, and they'll be like, well, I don't really need that critical illness policy, or I don't need that worksite voluntary benefit anymore, so they can drop it, and they can save the money coming off their paycheck because they don't need it anymore, and then also it allows the employer to remove ineligible dependents, right, because, you know, prime example of that might be an ex-spouse, whereas if you did a passive enrollment, like, you could literally still have an ex-spouse on your plan who really shouldn't be eligible for your plan anymore. Okay, next up, it allows the employees to actually consider a flexible spending account, FSA contributions, right, because for your FSAs, that money that you put in every year, it's use it or lose it, and so you might want to increase the amount of money, you might want to decrease the amount of money, and so you need to actively think about that during open enrollment, where if it's passive, they might just say, okay, we're just going to put x amount of dollars in because that's what you put in last year, and that might be totally the wrong amount of money. Okay, now, there are also, so fine, so active sounds wonderful. Why is it 50-50 for active versus passive? Why doesn't everybody do active? Well, there are benefits to passive. The A number one benefit to a passive open enrollment is it's easier because, of course, the employees don't mistakenly drop off the benefits, and believe me, I've told you before, I have actually personally presented at over 200 open enrollment meetings, and I will tell you that, and we did open enrollment support across our 2,000 employer clients at Compass, and by and large, many employees are just tuned out. They don't pay attention. They don't put much effort into it. I'm not making a value judgment around that. I'm just saying they don't, okay, and in fact, this equitable survey found that the typical employee only put in about 30 to 60 minutes thinking about their open enrollment decision, and they contrasted that to the fact that the average employee spends two hours a day on social media, so like 30 to 60 minutes a year on open enrollment, two hours a day on social media, so again, I'm not making a value judgment. I'm just saying they're not willing to put in the time. Okay, so that's really the enemy. The enemy here of this whole active versus passive, the enemy here for this whole 53% regretting, the enemy is employee inattention, and believe it or not, I have actually seen employers who have effectively addressed employee inattention, and here's how they did it. Open enrollment was not the sole responsibility of HR. Show me a company where open enrollment is the sole responsibility of HR, and I will show you a company that has probably more than 53% of the employees actually regretting their decision. Why? Because at most companies, the employees don't pay attention to HR, and again, I'm not making a value judgment. I'm just saying that's been my observation. That's how it is. Now, how have companies overcome this? It's because overall, the employee health plan isn't just the responsibility of HR. The people outside of HR on the executive team actually care about the employee health plan, besides the fact that it costs $15,000 per employee per year, but this is where the CEO has essentially said to the company that, or whoever the head of the organization is, the executive director, if it's a nonprofit, et cetera, is that, look, we are going to use management to disseminate information about open enrollment to the population, because we use management to disseminate information throughout the company for a whole bunch of things, whether it be related to sales goals or operational goals, or it might be safety goals for the organization. It's not the words. It's not the images. It's not even the plan offerings. It's who's delivering that information. At a 5,000-employee utility company, I saw where that utility company had approximately 80 peer wellness leaders within that organization that were the folks in the trenches alongside the employees who acted as the adjunctive communication mechanism for open enrollment and employee benefits. It wasn't just coming from HR. They also had people who were working alongside of them who were also tasked with communicating and answering questions, et cetera, et cetera. Hugely effective. Next up, for retail, two multi-thousand-employee nationwide retailers that I've worked with, those retailers would have daily stand-ups in the store to talk about certain merchandise that they were trying to push for the salespeople or various priorities for shipments coming in and stocking shelves, et cetera, et cetera. They would use it operationally and for sales purposes. They included in those daily stand-ups information about the employee benefits and open enrollment. Again, it was through the management. Show me a company where they actually include the management team and the executives outside of HR in the employee health plan and in open enrollment, and I will show you an employer that actually has greater employee engagement in their open enrollment, greater satisfaction with their open enrollment choices, and I would argue even better healthcare quality and lower healthcare costs. So this is hugely important. Now, I understand, look, the CEO and the management, they're busy. No one is ever not going to be busy. The question is, is it just a priority? And if you want to make open enrollment a priority within your organization, then you can absolutely improve these numbers. And that's what I wanted to share today. Thank you for watching A Health Care Z.