A Guide to Surviving Open Enrollment 2025 for US HR Teams

Open enrollment for employee benefits is just around the corner. Starting in the fall, your teams should have the opportunity to review and adjust their plans for the upcoming year.

Benefits have never been more important. 2023 saw a record-breaking number of workers enroll in US health insurance against a backdrop of economic uncertainty. HR teams can expect a similar level of interest going into 2025 as their employees seek more flexibility and support.

Getting a head start on open enrollment can help you prepare effectively and set up employees for success. Let’s explore what to consider, which steps to take.

What is open enrollment?

Open enrollment is a time you designate for employees to review and adjust their benefits plans. This typically includes health insurance, retirement funds, and perks like flexible saving accounts (FSAs). Employers may amend their benefit plans ahead of this time and the majority say they plan to do so in 2024.

There’s no set time for open enrollment. However, the US Health Insurance Marketplace usually runs theirs from November 1st through to January 15th. Most employers schedule their enrollment time to coincide with these dates.

Businesses typically hold open enrollment for two to four weeks to give employees sufficient time to review their options and choose new plans. Some may extend this period to a month.

If a worker misses open enrollment, they won’t be able to change their benefits until the following year. The only exception is if they have a Qualifying Life Event such as:

• A change in marital status
• Having or adopting a child
• Death in the immediate family
• Moving to a new ZIP code
• Becoming a US citizen
• Turning 26 and losing family coverage

US employers are required to regularly update workers about their benefits options under the Employee Retirement Income Security Act (ERISA). You can incur a penalty if you fail to inform employees about open enrollment.

Types of employee benefits available

Which benefits plans should you review ahead of open enrollment? Here’s a look at the main types and the aspects you might change.

Health insurance

Employer-covered healthcare is still the most important benefit for workers by far. It’s essential to analyze your options to ensure you’re still providing comprehensive yet affordable plans.

First, consider the types of plans you offer and whether they still suit your needs:

• PPO (Preferred Provider Organization): Employees get access to a network of providers but can see ones outside of it for an extra cost. PPOs offer a lot of flexibility but tend to come with higher premiums
• HMO (Health Maintenance Organization): This plan only covers treatment under the provider’s direct network. The trade-off is that they usually have low premiums
• EPO (Exclusive Provider Organization): Like an HMO, teams can only receive healthcare from centers within the provider’s network but they won’t need a referral
• HDHP (High-Deductible Health Plan): As the name suggests, HDHPs have high deductibles but low premiums. Copayments may only apply after participants have met the deductible

PPOs are the most popular plan among employees by a wide margin. Their low deductibles make them an affordable choice for most workers and their families. However, a significant number of people still opt for the other three.

Aside from choosing plans, you might decide whether you need to switch some of your current providers. You can evaluate each one based on their costs, coverage, and overall quality of service. Sometimes you can negotiate better deals like lower premiums, copayments, or coinsurance for a longer-term commitment.

The key is to get a full picture of the out-of-pocket costs. How much do all the deductibles, copayments, and coinsurance come to? Your total should be easily manageable on your worker’s salary with their local cost of living.

Dental and Vision Insurance

Health insurance doesn’t usually include treatment for eyes and teeth nor is it a federal requirement. However, the majority of people agree that it’s very important. Adding vision and dental insurance to your current plans shows your team that you recognize their needs and want to take care of them.

Similar to health insurance, you can choose between different types of plans. These typically cover routine exams, preventive care, and minor procedures. Employees may be able to get major procedures like surgeries done but with a lower percentage covered by insurance. 

Life and Disability Insurance

Life and disability insurance aren’t a federal requirement but many employers offer some form of coverage. Nine out of ten people get these plans through their job.

There are four main types of life insurance:

• Term: While this plan is usually the most affordable option, it only covers workers for a set period of 10, 20, or 30 years
• Whole: Participants get lifelong coverage provided they pay the premiums and can borrow or withdraw savings from the account
• Universal: There’s no fixed interest rate which means the cash value of the plan can fluctuate 
• Variable: Employees can pay into a fixed account and invest a portion of their insurance, making it one of the riskier choices

Disability insurance falls into two categories: short and long-term insurance. Both types provide coverage to employees who can’t work due to a serious illness or injury. However, people can only usually claim long-term disability benefits if their condition prevents them from doing any kind of job.

Spending and savings accounts

One in five US citizens say they have either a Flexible Savings Account (FSA) or a Health Savings Account (HSA). The majority plan to invest at least $1,000 USD into their funds, suggesting a lot of employees find this benefit useful.

FSAs and HSAs work in a similar way. Both you and the employee can make payments into the account up to a set limit. These contributions are pre-tax so they reduce your taxable income. Your employee can then use the funds to pay for medical costs like copays, deductibles, and services not included in their healthcare plan.

If you only offer one, your top consideration is which one suits your team’s personal situation best. The FSA has lower contribution limits but doesn’t carry into the following year. That makes it a great option for those with recurring medical expenses like families with young children or the 55+ demographic. On the other hand, the HSA rolls over into the following year giving employees greater savings opportunities, and is popular among younger workforces.

Retirement plans

While retirement plans aren’t a federal requirement, two-thirds of US workers have access to one. 

• Defined contribution plans are the most common type. Employees and often employers contribute money to an investment account. The amount you get in retirement depends on how much is contributed and how well the investments perform. Examples include 401(k), 403(b), and Roth IRA
• Defined benefit plans (also known as pensions) are less common. Employers promise a specific payment amount in retirement, based on factors like salary and years of service. The company bears the investment risk, not the employee

Aside from introducing or adding plans, you can reconsider how you structure these benefits. A survey found 87% of employees intend to review their company’s retirement plans during open enrollment. If you raise employer matches or adjust your vesting schedules, you could encourage higher participation. That way you can gain a greater tax advantage while investing in your team’s financial well-being.

Offering more equity can help workers diversify their retirement savings. Think about introducing Employee Stock Ownership Plans which give your team a stake in your company. 

Voluntary benefits

Open enrollment is a chance to review your voluntary benefits and ensure they continue to meet the needs of most employees.. You may discover that one perk is underutilized while there are repeated requests for another service or product.

Some of the most popular voluntary benefits include::

• Health and wellness: Some common examples include gym memberships and mental health counseling
• Financial: This benefit could be aid with student loan or mortgage repayments or advisory services
• Personal: You could consider other types of insurance such as travel or vehicle or subsidize services like childcare
• Security: Employees may appreciate different kinds of protection like identity theft protection or homeowners’ insurance

Reviewing these parks regularly helps you adapt your benefits management to trends and generational shifts. For example, there was a sudden demand for pet insurance in 2021 as workers transitioned back to the office and owners were concerned about the impact on their animal’s health and the potential vet bills.

How to prepare for a successful open enrollment

Now, let’s look at the preparatory steps you can take in the months leading up to open enrollment.

Allocate a generous amount of time

Start planning for open enrollment at least a few months in advance. You may need as much as six months depending on the complexity of your plans.

One strategy is to work backward from the renewal date. Identify all your objectives and plot them on a calendar, starting with the last item on your agenda. Make sure you allocate yourself a generous amount of time for each task so you can factor in unexpected obstacles and delays.

Let’s say the last thing you need to do before open enrollment is check all the benefits are visible on the system. You would add this task to your timeline first. Then you would keep adding tasks until you had an approximate start date for preparation.

A head start also gives you enough time to check in with employees. You can run anonymous surveys to get their feedback on what’s missing from current plans as you assess them.

Keep up with changing legislation

Stay updated with the latest changes in benefits regulation and employment laws. You may need to update your plans or change your policies. While providers should meet the minimum standards, it’s ultimately the employer’s responsibility to maintain continuous compliance.

Sometimes the changes might come from within the company. If you’ve grown or restructured, you may find you’re subject to different rules.

That’s often the case with ACA regulations. Small businesses can buy coverage through the SHOP marketplace and receive a tax credit on premiums. A growing company may discover they no longer qualify and need to look elsewhere for cost-effective plans.

If you’re concerned you don’t have the resources to manage compliance, consider partnering with a Professional Employer Organization (PEO). You can outsource all HR and benefits administration to them for a fixed monthly cost. Leading services like Deel help you avoid compliance issues and negotiate better deals with top US benefits providers.

Conduct a benefits audit

Analyze your current benefits to see where you could make improvements or capitalize on opportunities. You could consider the following data:

• Plan enrollment and dropout rates
• Number of claims made
• Employee feedback
• Engagement levels and retention rates
• Benchmarks against industry standards
• Analysis of competitor plans
• Compliance reports
• Cost-analysis of vendors

You’re not necessarily looking for gaps in coverage. If you add too many plans, you risk confusing and overwhelming your team with all the options—and 50% of employees already say they find the enrollment process stressful.

Instead, opt for the minimum number of plans you need to meet your and your employees’ needs. Suppose everyone’s satisfied with their 401(k)s and nobody’s shown an interest in a pension, you may want to consider prioritizing 401(k) plans or matching.

Get an update from current providers

Providers frequently change their plans due to new regulations and market trends. Request proposals to see what’s changed and determine whether you’re still satisfied with their offer. Say a provider has raised their premiums, is it in line with increasing healthcare costs?

Even if nothing’s changed, it may be worth comparing them against competitors. You can request proposals from multiple providers to see if they’re a better fit. Perhaps another option has recently introduced new services that your team has been requesting. Or, you may find they offer the same coverage at a better rate. 

Collect all essential information

Ensure the employee data you have in your system is accurate and up to date. This may include confirming if workers have had any Qualifying Life Events that affect their benefits. As a result, they might need to:

• Add or remove dependents
• Change coverage levels
• Enroll in additional benefits
• Waive certain benefits
• Update beneficiary designations

Alternatively, if you have a remote team, you could use a centralized platform to collect data. For example, HR software like Deel lets you request information from employees and have them securely upload files to one centralized platform.

Explain the benefits plans

Businesses must provide all employees with a Summary Plan Description under ERISA. This is a comprehensive document that describes all their benefits in plain English.

However, research shows that people still don’t understand their options. A recent report uncovered that many don’t know what terms like ‘deductible’ and ‘premium’ mean. Only 27% said they received resources about benefits from their company’s HR team.

You can invest extra time into drafting your Summary Plan Description and updating it regularly. ERISA has some specifications but you’re free to expand on these.

Also, consider providing extra resources to help employees understand and make informed choices. You can create guides and FAQs to explain all the options. Workshops can give teams the chance to ask questions and become more healthcare literate.

Let employees explore their options

Give your employees ample time to review their plan options. You could send an announcement two months before and send weekly reminders up until the day. That way teams will know to set aside time in their schedule to review their benefits.

For large organizations, consider offering staggered open enrollment periods to manage workload and provide better support to employees.

Many benefits providers have a user-friendly portal where individuals can compare plans, see what they cover, and calculate potential costs. They can access the platform at their convenience, making it easier for them to discuss options with family members.

Deel PEO’s self-service portal lets you take care of both tasks. You can send notifications and messages via the platform to nudge employees. Our dashboard also has a dedicated Benefits tab where eligible employees can manage their benefits enrollment process, benefits selection, and life events. All HR and finance teams have to do is approve their decisions.

Manage your US workforce with Deel

Open enrollment can feel high stakes. You only have a short window to let employees absorb a lot of information and make decisions that will impact them in the long term.

By planning ahead, you ensure employees have access to the best options and all the information they need to make informed choices. 

With Deel US Payroll and Deel PEO, you can streamline your payroll, compliance, and benefits across all 50 states. Book a demo with the Deel team to learn more.