A Guide to Open Enrollment for 2025

Open enrollment can be intimidating without the right preparation. Questions around the process are already inevitable, but as more employees prioritize their well-being, nothing should be left to interpretation.

After all, most people rely on their employer for coverage. Employer-provided insurance covered 57.3% of the U.S. population in 2023, according to the Congressional Budget Office. High participation, of course, creates the need for preparation. Employees want to ensure they secure the right benefits for themselves and their families. An exceptional open enrollment process helps participants:

• understand their selections
• easily and confidently make choices
• trust their employer

A frustrating open enrollment, however, fractures an employee’s experience. An overwhelming 80% of employees said they want to know about benefits no later than the first interview, according to the Society for Human Resource Management (SHRM) 2024 Employee Benefits Survey. And a MarshMcLennan Agency 2024 Employee Health & Benefit Trends report found that better benefits are the No. 2 reason for switching jobs after better pay. In other words, benefits — and, by extension, open enrollment — are crucial for retention.

So how do you ensure your company’s open enrollment process provides employees exactly what they need? Let’s explore each facet of open enrollment for 2025: what it is, how to prepare for it, important dates to know and the steps you can take to ensure a successful enrollment experience for every employee every time.

What is open enrollment?

Open enrollment refers to the period when employees can choose from the benefits their employers offer for the upcoming year. They are generally categorized into “open” and “locked” benefits.

Open benefits

Open benefits allow employees to enroll in or change them outside the open enrollment period. Some examples of open benefits may include:

• short- and long-term disability insurance
• pensions and retirement plans
• health savings accounts

Locked benefits

Locked benefits are those that an employee can’t change outside the enrollment period once they’re selected; they can only amend them during the next year’s open enrollment period.

Here are a few examples of locked benefits:

• health insurance
• dental and vision insurance
• flexible spending accounts

Key aspects to consider for open enrollment benefits

There is no one-size-fits-all approach for a perfect open enrollment, but there are things you can do to make the experience smoother for everyone. Let’s take a closer look at what to consider before rolling out your benefits.

Important dates and deadlines

The open enrollment period differs for every employer. Most companies schedule it in the fall so calendar-year benefits can take effect on Jan. 1. They usually allow two to four weeks for employees to choose their coverage.

For example, if an employee’s plan year runs from Jan. 1 to Dec. 31, open enrollment could take place Nov. 1 through Nov. 29 for an effective date of Jan. 1. Keep in mind that certain qualifying life events, such as the birth of a child or adoption, may allow an employee to enroll in or otherwise modify a locked benefit. New hire enrollment is another exception.

Plan options

For benefits administration to be seamless and effective, it’s important to know what your people really want. Employers should always gather feedback from employees using surveys and questionnaires before making a final selection. It’s just as helpful to conduct anonymous surveys after enrollment to gauge your workforce’s experience and improve the process for next year.

Network

Businesses must consider their health plan’s network size and structure to avoid excessive out-of-pocket fees for employees. Some plans cover a small network of “preferred” providers, meaning employees receive care at reduced rates from contracted medical professionals and facilities. These plans encourage participants to name a primary care physician and don’t require a referral to visit a specialist.

Open access plans, on the other hand, give employees more freedom to choose their provider, whether they’re “in” or “out” of network. These plans typically cover some out-of-network services and require a referral to see a specialist.

Pricing and price increases

Once you have a solid understanding of the types of benefits you want to offer, you should request proposals from multiple carriers and compare the cost and value of each option. Some vendors may have extra fees associated with administering plans, plan assets or per-employee enrollment. Remember to keep in mind the cost of copays, coinsurance and deductibles for your plan participants.

Contributions

Under the Affordable Care Act (ACA), employers with at least 50 or more full-time employees in the prior calendar year must provide affordable and adequate insurance coverage to full-time employees and their dependents or face possible penalties. Still, employers must consider what percentage of health insurance premiums they’ll cover and how much employees will contribute. Companies can help control costs by changing the contribution amounts or adjusting their benefit offerings.

When is open enrollment for health insurance in 2025?

Keep these important dates in mind for open enrollment for 2025.

Individual and family ACA marketplace plans

Individuals and families without access to employer-sponsored health insurance can purchase coverage through the Health Insurance Marketplace, a service created by the federal government following the passage of the ACA.

Open enrollment is Nov. 1 to Jan. 15.

• Enroll by Dec. 15 for coverage that starts Jan. 1.
• Enroll by Jan. 15 for coverage that starts Feb. 1.

Medicare

Medicare is a federal health insurance option for people 65 and older. The initial enrollment period (IEP), which runs for a total of seven months, allows individuals to enroll in Medicare around when they turn 65. If your birthday falls in January, you’ll have from Oct. 1 until April 30 to enroll without fear of facing a late penalty.

The open enrollment period runs Oct. 15 to Dec. 7 each year.

Medicaid

Medicaid is a federal program that provides wellness support to families below a certain income threshold. There is no open enrollment period for Medicaid, and each state has its own eligibility requirements. You can see what your state’s qualifications are at Medicaid.gov.

Dual eligible special needs plan

Dual Eligible Special Needs Plans (D-SNPs) enroll individuals who are entitled to Medicare and medical assistance from a state plan under Medicaid. Most people enroll in a D-SNP when they turn 65 and become eligible for Medicare. However, you can enroll in a D-SNP every year from Oct. 15 to Dec. 7.

How does open enrollment work?

With the right processes in place, you and your team can navigate your organization’s next open enrollment with confidence.

Preparation

Whenever you’re thinking of starting, chances are it’s not too early. The need for companywide communication starts before the open-enrollment period begins. Emails are a highly effective means of informing employees of an upcoming open enrollment, but when it comes to getting into the finer details of next year’s benefit offerings, there’s no substitute for meetings. It’s best practice to share your policy details electronically, too, so employees can easily find and reference them. Of course, organizational needs may differ. But every employer should prepare answers to commonly asked questions and communicate frequently to allow ample time for employees to review their choices and prepare to make changes.

Benefits review

Then there are the stickier subjects, especially changes in insurance providers and/or price increases. Be ready to address the reasons behind the structure and pricing of health plans. Some employees might be enrolling in benefits for the first time, either at your organization or in the workforce generally. Try to review the options with employees so they understand the impact on their coverage and paychecks and remember to emphasize that benefits are just one part of their total compensation.

Process management

If your organization still relies on paper forms to facilitate open enrollment, consider the advantages of HR tech. Self-service software enables employees to log in, view and research their benefit options and make their selections, often with just a few clicks of the mouse — or even a smartphone — from anywhere at any time. Paycom’s Benefits Administration tool helps streamline the process for HR and employees.

Benefits of open enrollment

An organization’s approach to open enrollment directly impacts the employee experience. Keep these benefits in mind to give your company a positive start to the open enrollment process.

Personalized benefits selection

The ability to easily select benefits, understand them up front and access information about them later is a more-than-reasonable expectation for any employee. Personalized benefits selection helps foster a culture in which workers both know and understand their choices — choices that are likely to stick with them for the next 12 months.

Cost management and control

Open enrollment is a constant process of setting goals, measuring success and adapting for the future. It presents a unique opportunity to control costs and maximize your ROI by monitoring how frequently employees use their plans. Employers should stay in touch with their brokers throughout the year to help track inefficiencies and prepare changes for the next.

Improved employee engagement

Employers should leverage open enrollment to show employees they truly care. It’s a chance to showcase your benefits, roll out new perks and improve engagement with a smooth and streamlined enrollment process. When employees come away with a clear understanding of their options and how their selections will impact them, everyone wins.

Compliance and risk management

Open enrollment helps companies meet their legal requirements and ensure compliance. Keeping employees informed of deadlines and providing the required notices and closures is an essential part of risk management. And when done correctly, it boosts employee engagement and your reputation as an employer people trust.

Open enrollment best practices

Employees don’t make benefit decisions lightly. With that in mind, here are four actionable ways to help them — and, in the process, help yourself and your team.

Clear communication

Communicate with your workforce frequently! The more time employees have to prepare for open enrollment, the better. Doing so could help your organization get the jump on more complicated questions. Keep in mind the likelihood of differing demographics within your organization. If your workforce includes employees for whom English is not a first language, you might want to provide translations. Then there are age differences. Information about retirement accounts or life insurance plans, for example, might need to be conveyed or packaged differently for Generation Z employees than for baby boomers.

Timely announcements

You’ve put in the work; now don’t let it flop. Consider using multiple channels of communication to ensure the best possible delivery of your message. And don’t worry about too much repetition. It’s the key to education!

While organizational needs differ, useful platforms might include:

• companywide meetings, either in-person or virtual
• webinars
• company intranet
• social media
• texting

Educational resources

When communication involves multiple resources that can be linked, it’s a good idea to gather them in a single document to simplify accessibility for employees. This can be done in the form of a fillable PDF. Some payroll providers offer benefits administration software so employees can review plan documents and test how deductions will affect their take-home pay before choosing. Once they enroll, payroll automatically updates so no one has to rekey a thing.

Utilizing technology

Open enrollment may seem like a lot, but a smooth, thorough process makes up for it in employee well-being and confidence. While a business isn’t legally required to use benefits administration software, it simplifies:

• setting up deduction amounts, enrollment dates and more
• enrolling in and informing workers about plans
• auditing benefits and avoiding overpayment
• notifying employees about benefits and open enrollment

Open Enrollment: FAQ

How far before the benefit’s effective date should open enrollment take place?

The open enrollment period differs by employer. Most companies schedule it in the fall so calendar-year benefits can take effect on Jan. 1. They usually allow two to four weeks for employees to choose their coverage.

What benefits can be changed outside open enrollment?

Open benefits allow employees to enroll in or change them outside the open enrollment period. Some examples may include short- and long-term disability insurance, pensions, retirement plans and health savings accounts.

How does Paycom support an employer’s open enrollment?

Paycom’s Benefits Administration tool streamlines enrollment by placing employees first and automating the flow of data into payroll. We help you:

• automate enrollment for qualifying events
• generate insightful reports
• streamline carrier communication with our Benefits to Carrier tool
• empower employees with an experience that allows them to make informed decisions

When does open enrollment start?

Employers can set their open enrollment period. Most companies schedule it in the fall so calendar-year benefits can take effect on Jan. 1.

When do open enrollment changes take effect?

Changes made during open enrollment usually take effect on Jan. 1 of the following year, depending on when an employer implements their health plan and schedules open enrollment.

What is a qualifying life event?

Qualifying life events, such as the birth of a child or adoption, may allow an employee to enroll in or otherwise modify a locked benefit.

What to do if you miss the deadline for open enrollment?

Qualifying for a special enrollment period lets an employee who missed open enrollment secure coverage.

How much can I contribute to HSA or FSA?

According to the IRS, individuals can contribute up to $4,150 and families can contribute up to $8,300 to their HSA for 2025. The maximum FSA contribution is $3,200 for 2025.

How is an HSA different from an FSA?

HSAs are owned by the employee and only available to those already enrolled in a High Deductible Health Plan (HDHP). FSAs are employer-owned and employees are considered participants.

Explore Paycom’s resources to learn more about open enrollment, compliance and more.