Open enrollment typically lasts two to four weeks and comes around once a year. For most employees, it gets about 10 minutes of attention — a quick scroll, a click on "same as last year," and done. The decisions made during open enrollment affect your health coverage, your tax situation, and your take-home pay for the entire year ahead. Here's what to actually look at.
Start Here: What Changed from Last Year?
Before choosing anything, review what changed. Employers revise offerings annually — premiums go up, plans get discontinued, new options are added, deductibles shift. If you skip this step, you may auto-renew into a plan that no longer serves you as well as it did.
- Any premium increases for your current plan
- Changes to deductibles, copays, or out-of-pocket maximums
- Whether your doctors are still in-network
- New plans or plan tiers being offered
Understanding Your Health Plan Options
| Plan Type | How It Works | Best For | Trade-Off |
|---|---|---|---|
| HMO | In-network providers only; referrals required for specialists | Predictable costs; rarely need specialists | Less flexibility; no out-of-network coverage |
| PPO | Any provider in or out of network; no referrals required | Those who see specialists or want flexibility | Higher premiums than HMO |
| HDHP | High deductible, lower premium; eligible for HSA | Healthy individuals willing to self-fund routine care | Higher out-of-pocket before coverage kicks in |
| EPO | Like PPO but no out-of-network coverage except emergencies | Moderate flexibility at lower cost than PPO | No out-of-network coverage |
The HDHP + HSA combination is frequently overlooked. If you're relatively healthy, this pairing offers triple tax advantages: contributions are pre-tax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Unused funds roll over indefinitely — unlike FSA funds.
Key Terms to Know Before Comparing Plans
- Premium: What you pay per paycheck for coverage, regardless of whether you use care.
- Deductible: What you pay before insurance begins paying.
- Copay: A flat fee per visit or service.
- Coinsurance: After meeting your deductible, your percentage share of costs.
- Out-of-pocket maximum: The most you'll pay in a year. Once hit, insurance covers 100% of covered services — your protection against catastrophic costs.
FSA vs. HSA: Know the Difference
- FSA: Available with most plan types. 2025 limit: $3,300. Use-it-or-lose-it — funds generally expire at year end. Not portable if you leave the job.
- HSA: Only with an HDHP. 2025 limits: $4,300 (individual) / $8,550 (family). Rolls over indefinitely. Portable. Can be invested once balance exceeds a threshold. Often called a "triple tax advantage" account.
Think of a maxed HSA as a second retirement account. After age 65, you can withdraw for any reason and pay ordinary income tax — just like a Traditional IRA. The long-term accumulation potential is significant.
Don't Overlook These Enrollments
Life Insurance
Many employers provide basic coverage at 1–2x salary at no cost. During open enrollment, you often can purchase additional coverage without a medical exam (guaranteed issue). If you need more than the base amount, this is typically the easiest and most affordable time to add it.
Disability Insurance
Short-term and long-term disability may be offered with guaranteed issue during open enrollment — no medical exam required. Review what your employer provides and assess the gap between that coverage and what you'd actually need month-to-month.
Dependent Care FSA
If you pay for child care or elder care, a Dependent Care FSA lets you set aside up to $5,000 (household) in pre-tax dollars. At a 22% federal tax rate, that's $1,100 in annual tax savings. Must be elected during open enrollment — cannot be adjusted mid-year without a qualifying life event.
Open Enrollment Checklist
- Review changes to your current plan vs. last year
- Estimate expected healthcare use (procedures, prescriptions, specialist visits)
- Compare total annual cost: (monthly premium × 12) + estimated out-of-pocket
- Confirm your providers are in-network under your selected plan
- If selecting an HDHP, open and fund an HSA — even partially
- Set FSA contribution amount based on known upcoming expenses
- Review life insurance and consider supplemental coverage if warranted
- Check disability insurance options and coverage gaps
- Enroll in Dependent Care FSA if applicable
- Update beneficiaries on life insurance and retirement accounts
Beneficiary designations override your will. Check life insurance and retirement account beneficiaries every open enrollment — especially after marriage, divorce, or the birth of a child. An outdated designation can have serious consequences regardless of what your will says.
Sources
- Internal Revenue Service. (2025). Publication 969: HSAs and Other Tax-Favored Health Plans. irs.gov
- U.S. Department of Health and Human Services. (2024). Choosing a Health Plan. healthcare.gov
- U.S. Department of Labor. (2024). Consumer Information on Health Plans. dol.gov
- Internal Revenue Service. (2025). 2025 HSA Contribution Limits. IR-2024-137. irs.gov
- Kaiser Family Foundation. (2024). 2024 Employer Health Benefits Survey. kff.org
- Society for Human Resource Management. (2024). Employee Benefits Survey. shrm.org