Businessolver Blog

A Cosmo Quiz for Annual Enrollment?

A Cosmo Quiz for Annual Enrollment?
Posted on Tuesday, September 1, 2020 by Bridget Bingaman
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They’re fun, sometimes revelatory and always an easy conversation starter.

cosmo-quiz-active-or-passive-enrollment

As far back as the 1950’s, so-called pop-psych quizzes have been an entertaining way for people to evaluate their personal attributes, their relationships with others and any number of seemingly “hidden” psychological or sociological truths.

Is your BFF really on your side? How passionate are you? Are you too obsessed with your ex

Introduced by Cosmopolitan Magazine editor Helen Gurley Brown in 1966, the Cosmo Quiz format was never intended to be a therapeutic tool or a scientific methodology for evaluating one’s mental health. But, the magazine did rely on subject matter experts to develop the quizzes and assign weights to each answer. In fact, Brown turned to Viennese psychologist Ernest Dichter for the very first Cosmo Quiz, How Well Do You Know Yourself?

“Everybody wants to know where they stand,” says social psychologist Debbie Then in an interview on the topic. “People want to know how they stack up to other people. They want to compare themselves in a confidential way.”

“But these are not scientific,” Then adds. “In most cases, (the writers) sit around and come up with these based on their own experiences.”

So, when the topic of whether employers should hold an active vs. passive enrollment came up in conversation at Businessolver, we thought we’d develop our own Cosmo-type quiz. You can take it yourself at the bottom of this blog post.

And, we took things a step further by offering some aggregate client data that demonstrates an interesting trend over the past few years—and one that the pandemic appears to have bucked. More on that later. For now, let’s review the difference between the active and passive enrollment models.

In an active enrollment, employees must select their benefits by a certain date or risk losing some or all coverages.

During a passive enrollment, employees who take no action receive the benefits they had the previous year.

Pros and Cons of Each Model

Ultimately, each employer must decide which model works for them. And, that’s the purpose of our quiz. Here’s a short summary of the pros and cons of each model.

Active Enrollment

Pros

Cons

  • Higher employee engagement
  • Better ROI on benefits offerings
  • Higher benefits visibility
  • Gives employees an opportunity to think about and select their benefits
  • Can help promote higher benefits literacy

 

  • More administrative work
  • If not properly implemented, employees may not have all the right information to make informed benefits decisions
  • Employees could miss enrollment deadlines and be without coverage
  • More time consuming
  • Without a technology partner, could take more resources to implement

 

Passive Enrollment

Pros

Cons

  • Less time to implement
  • Requires less employee communication
  • Employees don’t run the risk of being without coverage
  • Less administrative work
  • No plan changes? No worries.

 

  • Employees are defaulted to coverage that may not be a good fit for them
  • Employees are less aware of benefits offerings and might not be aware of new options
  • Low engagement from employees
  • Potential higher benefits cost if employees are over-insured from default coverage
  • Lower benefits literacy

 

A Shift to Active Enrollment?

In 2011, a study found that 71% of U.S. employers opted for the passive route. In 2019, however, approximately 50% of employers reported holding a passive enrollment. While active enrollment does not appear to be the new standard, it’s safe to say there’s been a steady move away from the passive model.

Why the apparent shift? There are probably several factors at work. Traditionally, employers have been drawn to the passive model due to the administrative burden involved in active enrollments. But, with the introduction of more high-deductible health plans over the last decade or so, some employers may be leaning more toward active enrollments, especially if their HDHPs were completely replacing more traditional plan types.

From a technological perspective, the shift might also be due to the availability of better technology to support both employees and HR teams. Fewer paper-based enrollment processes, steady improvements in the intuitiveness of interfaces, decision support tools, artificial intelligence and many other advancements mean that active enrollments are no longer quite as daunting as before.

Finally, there are some very clear downsides to passive enrollment when it comes to doing what’s right by the employee. The passive model—where employees “let it ride” year after year—can result in the wrong mix of benefits over time. Packages that worked for the employee five years ago may no longer be optimal as they and their family members have matured. This can cause a serious strain on budgets and stress for employees who aren’t properly covered. Plus, since there are no real action items in passive enrollment, employees are more likely to be disengaged and may not know or appreciate the benefits their employer offers.

 

A Word of Caution

If you’re considering adopting an active enrollment this year, you need to be aware of some important drawbacks. If during annual enrollment employees aren’t informed about their benefits and they fail to make their selections before the deadline, they may be left without coverage for a full year, the May 2020 IRS decision on mid-year enrollments notwithstanding. This can cause major headaches for HR and benefits managers. Not to mention, an employee without coverage is not a happy one.

Direct communication with employees is key to active enrollment success. And, without a technology partner that can help streamline communications to relieve some administrative burden, active enrollment could become a huge lift for smaller HR departments.  

 

Trends Among Businessolver Clients

The data from our clients shows a slightly different, yet parallel, story. In 2018, 84% of Businessolver clients prepared to hold a passive enrollment for the 2019 plan year, while 16% decided to hold an active enrollment. The following year, those holding a passive enrollment dropped to 66%, while 34% introduced an active enrollment. So, like the rest of the nation, we’d been seeing a trend toward the active enrollment model.

At least until just recently.

Just as employers were starting to prepare for the 2021 plan year, the pandemic struck. From speaking with clients, we learned that many were planning to pivot back to the passive model out of concern for their employees. With so many of their workers dealing with uncertainty and adjusting to our new normal, these empathetic HR professionals simply wanted to reduce the complexity of annual enrollment as much as possible. So far, 75% of our Businessolver clients have reported they are holding a passive enrollment, with 25% sticking with the active model. In the case of our own organization, we held an active enrollment, which you can learn more about in this case study.

And Now, the Quiz!

Still on the fence about whether to hold a passive or active enrollment? Modeled after the popular Cosmo Quiz, our short Thinking Passive Enrollment? infographic can help. Take it today to find out which option might work better for your organization.

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