Open Enrollment

How open enrollment works

Most employer health plans run on a calendar plan year starting January 1, so open enrollment usually runs somewhere between late October and early December. During the window, employees can:

• Enroll in medical, dental, vision and other plans, or waive coverage
• Switch between plan options, such as from a PPO to a high-deductible plan
• Add or remove dependents
• Set contributions to a health FSA or dependent care FSA for the coming year
• Change voluntary benefits such as life, accident or critical illness insurance

The window exists because of Section 125 of the Internal Revenue Code. When premiums are deducted pre-tax through a cafeteria plan, elections must generally be made before the plan year and stay fixed for the year. The exception is a qualifying life event, which allows a consistent mid-year change. HIPAA also gives special enrollment rights, typically 30 days after events such as marriage, birth or loss of other coverage.

HSA contributions and 401(k) deferrals are not locked this way; employees can change them during the year.

Active vs passive enrollment

In passive enrollment, employees who do nothing keep this year's elections. It is less work, and most employers use it. The catch: FSA elections usually do not roll over, so anyone who wants an FSA has to elect it again every year.

In active enrollment, every employee must make elections or lose coverage (or default to a basic plan). Employers usually choose it when plans change significantly, to clean up dependent data, or every few years to make people look at their choices. It produces better decisions and much more work for HR. If you go active, plan for many reminder touchpoints and a strong default.

A 12-week open enrollment timeline

1. Weeks 12 to 9 before: finalize plan renewals and rates with the broker and carriers. Set employee contribution amounts.
2. Weeks 9 to 6: configure the benefits administration system, test enrollment flows end to end, and prepare the summary of benefits and coverage for each medical plan.
3. Weeks 6 to 4: announce dates and changes. Send required notices. Train managers and HR staff to answer common questions.
4. Enrollment window (2 to 4 weeks): run live sessions on every shift, send reminders at the start, midpoint and three days before close, and staff a help line.
5. Week after close: audit elections, chase missing dependent documentation, and send files to carriers.
6. Before the first payroll of the new year: load new deductions to payroll and spot-check paychecks.

The most common failure is step 6. If deductions are wrong on the first January paycheck, you will spend February processing retroactive corrections.

Required notices and documents

Depending on the plans and employer size, open enrollment materials commonly include: the summary of benefits and coverage (SBC) for each group health plan, a Medicare Part D creditable coverage notice (due before October 15 each year), the CHIP premium assistance notice, the Women's Health and Cancer Rights Act notice, and updated summary plan descriptions or summaries of material modifications when plans change. Many employers send them as part of the open enrollment packet.

Rules vary by plan type, funding and state, so check with your broker or benefits counsel each year.

Reaching hourly and frontline employees

A benefits portal link emailed to a work address does not reach a warehouse associate who never sits at a computer. For frontline workforces:

• Use SMS and mobile-friendly enrollment. A short text with a link and the deadline gets far better response than email.
• Hold sessions on every shift, including nights and weekends, and keep them to 15 minutes.
• Translate materials into the main languages of your workforce.
• Give supervisors a one-page summary so they can answer basic questions on the floor.
• Show the per-paycheck cost, not the monthly or annual premium. People budget by paycheck.

Our open enrollment email template gives you ready-made announcement and reminder messages.

Common mistakes

• Changing plans without explaining why. A higher deductible with no explanation feels like a pay cut.
• Not testing the enrollment system with realistic scenarios such as adding a newborn or dropping a spouse.
• Forgetting new hires. People hired during or just before the window need to enroll for both the current and the next plan year.
• No dependent verification. Ineligible dependents on the plan are an avoidable cost; audit when you can.
• Ignoring the Marketplace calendar. Employees whose spouses get coverage through the ACA Marketplace have a different open enrollment, which usually runs from November 1 to January 15 on the federal exchange.