Open Enrollment

Open enrollment is a set period each year when eligible employees can review their benefit options and select benefits for the coming plan year. During open enrollment, people may enroll in coverage, decline coverage, change plan options, add or remove dependents and update certain payroll deductions, depending on the employer’s plan rules. After the deadline, they can’t enroll in programs or change benefits until the next open enrollment, unless an exception applies.  

The decisions made during open enrollment can have serious repercussions. For example, employees can look ahead to whether they or a dependent might need a dental or medical procedure in the coming year. Or they might think about opting for legal insurance because they want to have a will drawn up.  

What Is Open Enrollment?

Open enrollment is a window for employees to consider whether changes in their personal circumstances warrant different benefit elections. Unlike other benefits enrollment opportunities that may occur when an employee first becomes eligible or experiences a qualifying life event, open enrollment follows a scheduled annual timeframe established by the employer and/or benefits provider.  

Once the enrollment period ends, benefit changes are generally not allowed until the next annual open enrollment, unless a qualifying life event occurs. 

Why Is Open Enrollment Usually Limited To A Short Window?

Open enrollment is typically limited to a short, defined period (often two to eight weeks) so employers and benefit administrators have time to process elections before the next benefit plan year begins.  

During this time, enrollment information is reviewed, insurance carriers receive updated participation records and payroll systems are prepared to reflect the new benefit deductions.   

This scheduled enrollment window gives eligible employees the chance to weigh their options while leaving benefits administrators and insurance providers enough time to coordinate coverage transitions and finalize payroll updates.  

What Can Employees Typically Change During Open Enrollment?

Employees can use open enrollment to determine what benefit options will best support their anticipated needs for the upcoming benefit plan year.  

Depending on the employer's plan rules, employees may be able to make several types of benefit changes, such as: 

• Plan option changes. Employees may select a different benefit plan when multiple options are available, allowing them to choose coverage that better fits their upcoming needs.
• Coverage ties. Employees may change between employee-only coverage and dependent coverage if their eligibility or household situation has changed. 
• Adding or removing dependents. Eligible dependents may be added to or removed from certain benefit plans in accordance with the employer's enrollment rules and eligibility requirements.
• Updating certain contribution elections. When permitted, employees may adjust contributions to eligible benefit accounts or retirement plans for the upcoming benefit plan year.
• Confirming waivers. Some employers require employees who decline available coverage to confirm or renew benefit waivers if they are not automatically carried forward.

How Should Employees Review Options During Open Enrollment?

Comparing available benefit options can help employees determine which elections align with their coverage preferences and financial circumstances for the upcoming benefit plan year. 

Key considerations during the comparison process include:  

• Total expected cost. Compare more than the monthly premium by also considering deductibles, copayments, coinsurance and projected out-of-pocket healthcare expenses based on expected medical usage.
• Network and provider access. Review whether preferred doctors, specialists, hospitals and other healthcare providers participate in the plan's network, since provider access may differ between plan options.
• Prescription coverage considerations. Check whether regularly used medications are covered under each plan's formulary and compare any differences in copayments, coinsurance or pharmacy requirements.
• Whether dependents need coverage. Consider whether a spouse, children or other eligible dependents require coverage and compare the available coverage tiers offered under the employer's benefit plans.
• If the current life situation has changed since last year. Evaluate whether events such as marriage, the birth of a child, changes in employment or evolving medical circumstances make different benefits enrollment elections more appropriate for the upcoming plan year.

What Is Passive Enrollment (And When Is It Used)?

Passive enrollment occurs if employees don’t change their existing benefit elections during open enrollment and the employer allows the same benefits to carry forward to the next benefit plan year.  

Whether passive enrollment is available depends on the employer's enrollment process and the rules governing each benefit plan. Even if employees don’t want to change anything, they may not want to count on passive enrollment. It’s important to review open enrollment materials because their current plans may not be offered for the coming year or their plans’ costs, coverages and enrollment requirements could be changing.  

What Should Employers Do Before Open Enrollment Starts?

By preparing for open enrollment, businesses can reduce administrative delays and give their employees the information they need to make informed benefits.  

Many organizations coordinate these activities internally. Others, however, rely on HR outsourcing providers to help manage enrollment communications, documentation, administrative workflows and other tasks. 

Employer preparation typically includes:  

• Confirming dates and deadlines.
• Completing plan changes and contributions, where applicable.
• Preparing employee-facing summaries and comparison materials.
• Planning employee communications and reminders.
• Defining documentation requirements and submission procedures.
• Setting internal processing timelines for payroll deductions and benefit effective dates.

What Happens After Open Enrollment Closes?

Once the open enrollment period ends, employers and benefit administrators begin implementing the elections submitted during the enrollment window.  

Enrollment information is transmitted to insurance carriers, payroll systems are updated to reflect applicable deductions and administrative records are finalized.  

Employees’ elections are locked in, unless a qualifying life event or another permitted exception allows changes under the employer's plan rules.  

Employees should immediately review any enrollment confirmations they receive and keep copies of those records for future reference. Retaining confirmation documents can help verify benefit elections if questions arise after coverage becomes effective. 

FAQ

What happens if I miss the open enrollment deadline?

In most cases, your benefit elections lock after the deadline, so you can’t enroll or change plans until the next open enrollment. The main exception is a qualifying life event (like marriage or birth) under your employer’s rules. 

What is passive enrollment, and should I rely on it?

Passive enrollment means your current elections carry over if you take no action and your employer allows it. Even then, review materials—plans, premiums, provider networks, and payroll deductions can change for the new plan year. 

What should I compare when choosing between health plan options?

Look beyond premiums. Compare deductible, copays/coinsurance, prescription coverage, and expected out-of-pocket costs based on your likely care needs. Also make sure your preferred doctors, hospitals, and pharmacies are in-network for each option.