The Power of Defaults
Default enrollment is the most powerful behavioral economics tool available to plan sponsors. When employees are automatically enrolled in a plan (opt-out), enrollment rates are dramatically higher than when employees must actively choose to enroll (opt-in). This is the status quo bias in action — people tend to stick with the default.
Defaulting into the HDHP
Employers who default new employees into the HDHP consistently see HDHP adoption rates of 60–70% — compared to 20–30% when employees must actively choose the HDHP. This dramatically reduces adverse selection and plan cost. The key is to communicate the default clearly and provide employees with an easy opt-out process.
Default Enrollment Communication
Watch Out
Default enrollment must be communicated clearly and transparently. Employees who discover they were enrolled in a plan without their knowledge — even if it is the best plan for them — will feel manipulated. Communicate the default enrollment clearly: "You will be automatically enrolled in the HDHP unless you actively choose a different plan by [date]." Provide an easy opt-out process and adequate time to make a decision.