The power of ‘no’: Turning passive enrollment into active decisions

A decade ago, benefits enrollment was a highly personalized process. Employees sat down “knee to knee” with someone from human resources, discussing options and making informed choices about coverage. Those face-to-face interactions ensured that every employee either accepted or actively declined benefits, leading to higher participation and engagement.

Fast-forward to today, and the landscape has changed dramatically. The pandemic accelerated the shift to digital self-service platforms, leaving many employees to navigate the enrollment process on their own. Technology, while efficient, has introduced new challenges — clunky interfaces, poor communication and limited engagement with voluntary benefits. As a result, passive enrollment has become the norm, and insurance brokers are facing an uphill battle to ensure clients’ employees make informed decisions about their coverage.

So, how can brokers help clients drive meaningful engagement and maximize benefit participation? Surprisingly, it all comes down to one simple strategy: requiring employees to actively decline coverage.

The power of the regret of ‘no’

Behavioral economics tells us that people are more likely to make a decision when faced with the potential regret of not acting. This concept, known as the power of the regret of ‘“no,” can be a game-changer in benefits enrollment. If employees are not required to make an active choice, many will simply avoid the process altogether. But when forced to say “yes” or “no,” they instinctively weigh the consequences of declining coverage.

For example, consider an employee reviewing long-term care insurance. If they’re not prompted to make a decision, they may never consider the financial impact of an unexpected illness or injury. But if they are required to accept or decline, they must confront the possibilities: “What if I need this coverage in the future? Will I have enough savings to cover costs?” This moment of reflection — however brief — can push more employees toward opting in.

The problem with passive enrollment

Although passive enrollment may seem efficient, it often leads to lower engagement and missed opportunities for coverage. Many employees are unfamiliar with the benefits being offered or assume that their current coverage is sufficient. Without a structured process that forces them to engage with their options, they may overlook critical benefits that could provide financial security in times of need.

What’s more, with a growing remote workforce, the absence of in-person enrollment meetings has made it even easier for employees to ignore benefits communications. A passive approach removes the urgency to review options, leading to last-minute decisions — or worse, no decision at all.

For brokers, this shift presents a challenge: How do you help clients increase engagement and ensure their employees make informed choices? The solution lies in reintroducing an element of active participation by requiring employees to opt in or out of coverage.

Real-life impact: A simple ‘yes’ or ‘no’

To illustrate this concept, consider a personal example: When my child went off to college, I repeatedly received emails about tuition reimbursement insurance. Initially, I ignored them  — I had already paid tuition and didn’t see the value.

Then, I received a final notice: “Your child cannot attend classes until you accept or decline coverage.” Forced to decide, I visited the website with the intention of opting out. But before declining, I noticed the cost of this insurance — it was far lower than I expected. Suddenly, I thought, “I’d be crazy not to take this coverage!” And just like that, I purchased insurance I had previously dismissed.

This experience perfectly illustrates the power of requiring a response. Without that final nudge, I never would have given the coverage a second thought.

A broker’s role in driving engagement

Because you are an insurance broker, your role is to help clients implement strategies that drive participation and improve employee decision making. Passive enrollment may be the industry trend, but by encouraging clients to require active elections, you can significantly boost engagement rates.

Here are a few best practices I suggest for brokers.

1. Encourage active enrollment. Work with clients to shift from passive to active decision making. Require employees to formally accept or decline coverage rather than letting them bypass the process altogether.

2. Leverage behavioral economics. Use the “regret of no” principle to help employees recognize the value of coverage before opting out. When employees visualize the potential consequences of declining benefits, they are more likely to opt in.

3. Enhance communication strategies. Clear, consistent messaging is essential. Educate employees on their options well before the enrollment deadline. Use multiple communication channels — email, webinars, video content and interactive tools — to ensure the message reaches them.

4. Simplify the enrollment experience. Many employees disengage due to complex enrollment platforms. Work with clients to ensure their systems are user-friendly and provide clear information on benefits options.

5. Collaborate with HR teams. HR teams play a crucial role in driving participation. Work closely with them to ensure they have the resources and training to communicate benefits effectively. Offer enrollment support services to help employees navigate their choices.

Make ‘no’ an active decision

The shift toward digital, self-service benefits enrollment isn’t going away. But brokers have the opportunity to shape the way employees engage with their benefits. By helping clients implement strategies that require employees to actively accept or decline coverage, brokers can drive higher engagement, increase participation rates and ultimately ensure that more employees are adequately protected.

Passive enrollment may be convenient, but it comes at a cost — missed opportunities, lower engagement and financial risk for employees. By making a simple change — requiring a decision — brokers can play a key role in improving outcomes for their clients and their employees.

After all, when it comes to benefits enrollment, sometimes all it takes is a simple “yes” or “no” to make a life-changing difference.

Tom Smith is the vice president of enrollment services with Trustmark. Contact him at [email protected].