90% of employers have open enrollment errors — and it's costing them billions

Employers are facing a steep increase in healthcare costs this year, impacting how they shape their benefits budget and the health of their workforce. But what if some of that budget isn't going to employees at all because of open enrollment errors?

Benefits brokerage Nava Benefits audited over 600 insurance carrier bills charged to their employer clients, finding that 90% had enrollment errors. While some were damaging financially — the employer was paying for workers who weren't actually enrolled in healthcare benefits — others negatively impacted the company's reputation: Workers who had chosen to be on their employer's plan weren't enrolled, and now can't access care. Either way, these mistakes come at a cost. 

"We started to dig further into this because we heard from employers and HR teams that they audited one random carrier bill, and there were five big things wrong, costing them $10,000 every month," says Brandon Weber, co-founder and CEO of Nava. "Now we've run into situations where a not-very-large employer is actually paying $200,000 a year in insurance bill costs that they shouldn't have paid." 

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Collectively, employers may be losing billions of dollars in open enrollment mistakes made by carriers, underlines Weber. And while errors that involve leaving out employees seem less costly, Weber notes that it hurts the employer's relationship with their workers. 

"If we were walking around thinking we had medical coverage, and we actually don't, that creates a huge amount of frustration and pain for the employee," he says. "We would get denied care at the worst possible time because people often only use their healthcare in an emergency situation. That potentially poses a legal risk to the [organization]."

Weber recognizes that many HR teams don't have the resources or staff to audit large volumes of bills from their insurance company. Instead, he believes benefits brokers should take ownership of the problem — something Nava has officially decided to take on this year. The brokerage is even using generative AI to help compare enrollment data to the carrier bills so they can audit at scale. 

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"The benefits broker is the perfect role to solve this problem," says Weber. "We are tasked to design, deploy and administer benefit plans, so we will take ownership of ensuring that your employees are enrolled in the right plans."

Weber points out that this isn't just an issue employers see at the end of open enrollment. Employees may leave a company at any given point, and companies should make sure they aren't paying for someone who is long gone. 

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Ultimately, if the benefits broker is transparent and has aligned its incentives with the employer (not the carrier), then this should be an issue the brokerage can take action on, explains Weber. An overworked HR team can't do it all.

"Pretty much every client, every employer we've engaged with has this problem," says Weber. "Every employer in America is paying for the next healthcare increase. We have to solve these problems."