What is Open Enrollment?
Open enrollment is the designated period when employees can enroll in, review, or make changes to their health insurance and other benefits for the year ahead. And for many small and midsize businesses, open enrollment season is one of the most stressful times of the year.
It’s the few weeks when every employee must make decisions about their health care and benefits for the year ahead, often under tight deadlines and confusing conditions. For employers, it’s a compliance-heavy, high-stakes process that will either reinforce trust or, when handled poorly, erode it.
Yet every year, common mistakes trip up even well-intentioned organizations and end up alienating workers and creating avoidable costs. Even worse, when employees make poor choices or feel unsupported as a result of these errors, the benefits that employers work so hard to provide lose much of their value. That impact is not just on the individual but on the organization as a whole in their ability to boost employee retention and recruitment.
Fortunately, most mistakes are preventable. Here's an open enrollment checklist of the most common pitfalls businesses face, along with strategies to avoid them.
How Can Employers Avoid Common Open Enrollment Mistakes?
Employers can avoid common open enrollment mistakes by preparing early, maintaining compliance, educating employees, communicating clearly, collecting feedback, and partnering with experienced HR or PEO providers.
Common Open Enrollment Mistakes
- Waiting too long to prepare.
- Overlooking compliance requirements.
- Failing to educate employees about benefits options.
- Communicating poorly or inconsistently.
- Skipping post-enrollment feedback.
- Overcomplicating or underplaying the benefits package.
- Managing open enrollment alone without expert support.
1: Waiting Too Long to Prepare
“Every year there are some employers for whom open enrollment starts on Oct. 15, and they're making their last benefit decision on Oct. 1—and wondering why they can't get their materials out to employees on time,” Kim Buckey, vice president of compliance communications at benefits management firm DirectPath, told the Society for Human Resource Management (SHRM).
The calendar creeps up faster than anyone expects (especially when it’s harried small business owners or leaders making these decisions), and benefits enrollment ends up beginning before the company is even ready for it. Waiting until the last minute will leave no room for careful review, thoughtful decision-making, or clear communication. The result is rushed decisions, incomplete materials, and stressed employees.
How to avoid the ill effects of procrastination:
Treat open enrollment like any major business project. Build a backward timeline: when do employees need their materials, when do you need vendor decisions finalized, and when should communications go out? Start at least three to four months ahead, especially if you anticipate changes in plan design.
2: Overlooking Compliance
Benefits compliance is complex, and even minor errors can have significant consequences. Mistakes in the benefits enrollment process can expose employers to costly fines, regulatory scrutiny, and a loss of employee trust.
Employers are required to distribute a wide range of notices and disclosures each year, from COBRA and HIPAA to ACA summary of benefits and coverage documents. Worse, because the employee benefits package often has many options and different kinds of benefit offerings, it can get very complicated very quickly. And missing even one requirement can open the door to penalties or legal exposure.
And you can’t rely on the assumption compliance requirements will change in the future to govern what you do today. "The ACA is the law of the land today," says Gary B. Kushner, president and CEO of Kushner & Co., a benefits advisory. "Is Congress going to change it? I don't know. I don't know if they know. But we have to play by today's rules."
How to avoid inadvertent compliance violations:
Maintain a compliance checklist and review it annually. Confirm that all required notices are not only prepared but distributed to every eligible employee. When in doubt, consult with your broker, legal counsel, or a PEO that specializes in compliance-heavy benefits administration.
3: Failing to Educate Employees
Perhaps the single biggest mistake employers make during benefits enrollment is assuming employees understand their options. They don’t.
According to MetLife’s annual benefits study, 44% of workers didn’t consult anyone before enrolling last year. Unsurprisingly, this group was less likely to understand the employee benefits package, more prone to financial anxiety, and more worried about unexpected health issues. A separate survey from Equitable found that more than half (53%) of employees regretted their benefits decisions altogether.
“If employees don't understand their benefits, they're not going to use them,” says Guy Benjamin, CEO of health benefits management platform Healthee. “Why are you then investing time and effort to make sure you have the best benefit package if you're not making that package accessible to employees?”
How to avoid regretful employees:
Build education into the process. Hold virtual or in-person info sessions, create short explainer video, and prepare easy-to-ready guides. Employees shouldn't have to dig through fine print to make critical choices about their benefits enrollment.
4: Communicating Poorly (or Not at All)
Education is about explaining options. Communication is about how you deliver the message. Too many employers bury employees under dense HR emails or jargon-filled slide decks.
“Ditch epically long e-mails and rely on a steady cadence of shorter e-mails,” advised Mehul Jain, a solutions consultant at Collective Health, in SHRM. “Use snappy language and plenty of bullet points.” Similarly, replace or define confusing jargon and specialized plan terms with plain-English descriptions and maybe even a full glossary for unfamiliar terms.
Brokers and consultants can definitely help with communications; you don’t have to go it alone! (See Mistake #7 below) That said, the communications should still come from you. “Most people prefer to hear from their companies,” says Buckey, noting that anyone who has had a bad experience with an insurance company will likely regard them as ‘the enemy.’
How to avoid communication lapses:
First, think like a marketer. Use bold graphics, concise messaging, and a clear call to action. Leverage tools or partners to design and brand your open enrollment materials for clarity and ease of reading. Keep communication short, frequent, and focused on what employees need to do. Second, empower your leadership team to communicate effectively. “Empowering managers with the training they need to serve as advisors and shepherd their direct reports throughout the election process will not only help to improve the overall employee experience, but it also aids in retention efforts,” found a MetLife study on employee benefits trends.
5: Skipping the Feedback Loop
Too many employers treat open enrollment as an isolated event; once the window closes, they move on and don’t look back. But failing to solicit and capture employee feedback creates two serious problems.
First, it leaves employers blind to what their workforce actually values. Without real data, benefit decisions become guesswork and hope-fueled rather than data-driven. That not only risks wasting money on underused options but also means missing opportunities to invest in programs that employees would truly appreciate and use.
Second, it forces employers to reinvent the wheel every year. Each open enrollment season should build on the one before it. Yes, regulations and costs change, but the process itself should steadily improve. Employers who ask for feedback through quick surveys, focus groups, or post-enrollment check-ins enter the next season armed with insights they can act on. Those who don’t risk repeating the same mistakes year after year.
How to avoid blind decision-making:
After enrollment closes, ask employees about the clarity of communications, ease of decision-making, and overall satisfaction. This process might include conducting or gathering engagement surveys, focus groups, exit interviews, market benchmarking data, and more. “Using a combination of those methods is the best way to get a comprehensive understanding of both how your employees are engaging with the benefits, as well as how they’re perceived,” say Erika Duncan, a human capital consultant at UHY, an accounting and advisory firm.
6: Underplaying (or Overcomplicating) the Employee Benefits Package
Another frequent mistake: treating benefits as a bureaucratic requirement rather than a selling point. Employees don’t automatically know how valuable your offerings are unless you tell them. On the flip side, some employers overwhelm employees with too many options or overly technical language. Both approaches miss the mark. Aim instead for the happy medium: messaging that gets employees excited about their benefits options without over-hyping or over-complicating them.
How to avoid missing the opportunity to maximize employee satisfaction with their benefits:
Showcase your benefits with enthusiasm but keep the messaging simple. Highlight unique perks like telemedicine or wellness programs. Present plan options in a side-by-side format to make comparisons easier and to highlight areas where your offerings stand out. Don't leave communications at just the features of your benefits plans; talk up their strengths and advantages too.
7: Trying to Do Benefits Enrollment Alone
Finally, perhaps the most consequential mistake: small businesses trying to manage open enrollment entirely on their own. Owners or small HR teams may spend weeks bogged down in paperwork, forms, and employee questions, and that’s time that distracts from running the business.
How to avoid open enrollment turning into a time sink:
Get help. That may mean leaning more heavily on your broker, outsourcing to a benefits administrator, or working with experts at a PEO. Especially in today's economic climate, no one can afford to put their business on pause while they handle Open Enrollment. Instead, investing in expert support not only reduces compliance risks but frees leaders to focus on the company's core, revenue-generating mission.
For small business open enrollment, partnering with a Professional Employer Organization like CoAdvantage offers a strategic advantage. A PEO helps manage benefits administration and compliance, plus improve the employee experience, all while giving small business owners back valuable time to focus on growth.
Key Strategies to Avoid Open Enrollment Mistakes
- Start planning at least three months in advance.
- Maintain an open enrollment checklist, and distribute required notices.
- Educate employees with simple, accessible resources.
- Gather post-enrollment feedback and improve annually.
- Partner with a PEO for expert support and compliance guidance.
The Bottom Line
From educating employees with the utmost basics ("what is open enrollment") to enabling them to make the right selections out of a bewildering array of employee benefit package options, open enrollment can be a minefield. But it doesn’t have to be chaotic.
Effective open enrollment reflects both organizational preparation and disciplined communication. With structured planning, clear messaging, compliance diligence, and continuous improvement, employers can transform the open enrollment process from a stressful deadline into a trust-building opportunity that strengthens employee engagement.
With early planning, clear communication, compliance diligence, and a willingness to learn, employers can transform the benefits enrollment process from a dreaded obligation into a trust-building opportunity.
Done right, open enrollment reinforces a company’s values, highlights its investment in employees, and strengthens the relationship between the workforce and leadership. The choice, as always, is in the preparation.
CoAdvantage, one of the nation's largest Professional Employer Organization (PEOs), helps small to mid-size companies with HR administration, benefits, payroll, and compliance. To learn more about our end-to-end benefits administration and offerings, contact us today.
**The information provided on this website is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and completeness of the information, we make no guarantees about its correctness, completeness, or applicability to your specific circumstances. Laws and regulations are subject to change, and you should consult a qualified legal professional before making any decisions based on the information provided here.
