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The years since COVID opened employers’ eyes to the full breadth of employees’ lives outside the workplace and the support they need. As a result, organizations expanded their benefits programs to encompass more caregiving, mental health and other offerings. They’ve also broadened their leave policies to better support the needs of the modern workforce. Yet, while all these benefits are highly valued, an employer-sponsored health plan remains the most valued benefit for 63% of U.S. employees, with 53% citing it as their top deciding factor when considering a career move.
It’s easy to understand why employees prize health benefits so highly. Health care costs continue to skyrocket at unsustainable rates, with large U.S. employers projecting a 9% rise in overall health care costs for 2026. With much of the increase due to advances in cancer care, treatments for chronic diseases and specialty prescription drugs, many people are feeling hopeless about their ability to afford the care they and their dependents need to lead long, healthy lives.
It comes as no surprise, therefore, that 74% of U.S. workers are enrolled in a medical plan through their current employer, according to the upcoming 2026 Alight Employee Mindset Report. Among those who aren’t, 15% are covered through a spouse or partner’s employer plan. Fortunately, employers remain committed to providing their workers with this most coveted benefit.
According to the 2025 SHRM Employee Benefits Survey, U.S. employers rate health-related benefits as their top benefits priority, with 88% deeming them “extremely important” or “very important” for their workforces. Consequently, benefits enrollment is a significant focus during onboarding, as employers go to great lengths to provide new employees with benefits guides and plan comparison tools and ensure they understand how to navigate the benefits platform portal.
Getting new hires enrolled in an employer-sponsored health plan is crucial, but it’s only the beginning. The goal should be to keep employees engaged with their health plan throughout the year, including at annual enrollment when they should actively evaluate whether their current plan is still the most appropriate choice. Many employers conduct passive enrollments, however, where employees are automatically re-enrolled in their current benefits unless they actively choose to make changes. As a result, more than half of new hires enroll in a plan and never change it—or don’t change it for a very long time.
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are not eligible for passive enrollment because of IRS rules and program-specific requirements that require an annual re-election each year.
The lure of passive benefits enrollment
Employers are drawn to this "set-it-and-forget-it" approach because it streamlines the process and reduces much of the administrative burden inherent in active enrollment. It also eliminates the concern of employees forgetting to make their elections and ending up with either suboptimal or no health coverage. For their part, many employees welcome passive enrollment because they feel overwhelmed by making choices from a growing number of benefit plans, annual changes to carriers, plan features and providers and feel unprepared to navigate the enrollment process on their own.
Without a structured process that strongly encourages (or even requires) them to engage in an annual “benefits checkup,” however, employees may falsely assume their current coverage is sufficient even if it no longer meets their needs. They may also overlook opportunities for cost savings through new plan choices, benefits that fill in coverage gaps or pretax savings through Health Savings Accounts or Flexible Spending Accounts. The result is often higher out-of-pocket expenses for themselves and increased employer costs due to underutilized or misaligned coverage. For employees whose health status or life situation has changed, maintaining the status quo can be disastrous to their health or their finances—or both.
Passive enrollment also eliminates one key component of active enrollment—the opportunity to update personal information, such as dependent details, emergency contacts and addresses—all of which helps HR maintain accurate records for payroll, benefits carriers and compliance reporting.
Difficult decision
According to Alight’s book of business, passive enrollments have been steadily rising over the past three years from 75.1% in 2024 to 80.4% in 2026, while active enrollments have fallen from 24.9% to 19.6%. And while there’s no “right answer” as to whether an organization should opt for passive enrollment or make employees go through active enrollment every year, there are factors that can help guide the decision.
Organizations should consider active enrollment if they’re making plan changes to mitigate HC cost increases, for example. They’ll only achieve the desired savings if they get people to change plans. In addition, employers that frequently update their benefits packages should opt for active enrollment, as employees will need to review the new plans and decide what’s best for them. Furthermore, annual enrollment enables organizations to demonstrate the full value of benefits provided along with the employer contribution and set the stage for year-round engagement.
That’s not to suggest this is strictly an either-or decision. Many employers use a hybrid model—active for certain benefits and passive for others—depending on complexity, workforce needs and HR infrastructure. If an organization does not have the necessary staff or expertise, it may want to consider partnering with a benefits administration provider that can educate workers about the choices facing them and provide personalized decision support to guide them through the enrollment process in a timely fashion.
Powering the benefits check-up
Regardless of which enrollment model(s) it ultimately chooses, an organization should encourage employees to evaluate their benefits elections by providing the necessary resources for them to conduct a benefits check-up each year. Cost comparison calculators to see side-by-side differences in premiums, deductibles and out-of-pocket costs, coupled with decision support that makes everything personal and relevant, ensure employees are empowered to select the coverage they need at the right price point.
Increasingly, employers are finding this is best accomplished through the adoption of an AI-powered benefits platform like Alight Worklife® that simplifies complex processes like annual enrollment through high-tech, human touch resources and guidance. This includes tools like the generative AI‑powered Alight Assistant, which is reshaping the annual enrollment experience. Integrated directly into Alight Worklife, Alight Assistant provides personalized real‑time answers, simplified explanations of complex benefits information, always‑available support for common questions and guidance that helps employees make confident, informed decisions.
Benefit platforms that combine the power of AI with meaningful human interaction not only empower employees to select the most appropriate coverage for their needs, they also build a culture of benefit awareness and appreciation that passive enrollment alone cannot achieve. In turn, this positively influences engagement, productivity and retention—all key constructs in the ongoing war for talent.
