For small businesses, providing benefits is a critical way to strengthen employee recruitment, satisfaction and retention. Benefits can be among the most important factors employees weigh when deciding whether to join or remain with a company. When you take good care of your employees, they’re more motivated to take good care of your business.
Often, open enrollment is the only time during the year when employees can make major elections such as changing health insurance plans, adding dependents, or adjusting retirement contributions. Missing this window can create frustration and leave employees feeling stuck with benefits that don’t meet their needs.
It’s important for founders and business leaders to understand that the open enrollment process can be confusing and overwhelming for employees. Insurance terms and benefit options are not always intuitive, and employees may struggle to understand the impact of premiums, deductibles, and copays. Without clear guidance for employees, the task of managing their benefits can easily become a source of stress. When handled thoughtfully, however, open enrollment can reinforce your company’s reputation as a supportive employer.
It’s best to begin preparing for the open enrollment period well before the window officially opens. A good rule of thumb is to start preparing 30 to 60 days in advance. This gives leadership the space they need to evaluate benefit offerings, coordinate with carriers, and finalize documentation before communicating any changes to employees.
Beginning your preparation a month or two prior to open enrollment is also important for ensuring compliance with applicable provisions of the Affordable Care Act. If scaling beyond 50 employees, you will be required to offer affordable coverage to full-time staff as well as properly document employee eligibility and waivers. You’ll need to ensure you’re accurately tracking employee hours and retaining those records in case of an audit.
As you’re preparing for the open enrollment period, take stock of your current offerings, how they’re being used, and their financial impacts.
Before announcing open enrollment, small businesses should take a close look at their current benefits package, including any medical, dental, vision, and retirement options such as a 401(k) as well as ancillary benefits like life or long-term disability insurance. Reviewing your current offerings provides the foundation for identifying gaps and enhancements that might better serve your workforce.
It's equally important to evaluate your plan’s performance and cost trends. If you have access to claims data or utilization reports, these can provide valuable insights into how employees are actually using their benefits. For example, low participation in a particular plan may indicate that it’s either too expensive or not aligned with your employees’ needs. Additionally, reviewing year-over-year premium increases will help you anticipate budget impacts and identify opportunities to more effectively manage costs.
Once you’ve finalized your organization’s benefit plans for the coming year, the next priority is to communicate to your employees what’s changing and what will remain the same. This is where many small businesses stumble: A successful open enrollment strategy requires more than a single email announcement. Take the time to communicate what your staff needs to know clearly and consistently, using plain, transparent language.
To ensure your communication is as clear as possible, avoid using industry jargon, and clearly explain terms like deductible, copay, coinsurance, and out-of-pocket maximum. Consider supplementing written communications with a live Q&A session, one-on-one meetings, or recorded video walkthroughs so each employee can digest the information in a way that suits their learning style. This kind of clear communication during open enrollment not only reduces confusion but also builds trust in your company’s leadership.
Even experienced companies can make mistakes during open enrollment. Each of the common errors detailed below can be avoided with careful preparation and a well structured open enrollment process.
Often, employers wait until the last minute to communicate essential plan information to employees. Rushed communication can leave employees feeling unprepared to make important decisions about their benefits, leading to confusion and avoidable errors in their enrollment submissions.
Another common pitfall is to simply forward plan documents to employees and assume they “get it” without any additional explanation. Benefits are complex, and employees may not even know what questions they need to ask to fully understand what’s being offered or what is changing. If you don’t take a careful, proactive approach to communication, misunderstandings can result in frustration, financial strain, and unexpected exclusion of their medical costs.
Make sure to have HR personnel carefully verify each employee’s eligibility for the benefits on offer. Failure to do this can cause a great deal of hardship for staff due to errors such as new hires missing out on enrollment or recently promoted employees being dropped from their plans.
Be sure you have processes in place to carefully document all enrollment elections and waivers. Sloppy documentation procedures can cause costly compliance issues down the road.
For growing small businesses, it can be overwhelming to handle open enrollment internally. Working with a professional employer organization (PEO) or outsourced human resources partner can provide the critical support your team needs to make the process smooth and fully support your employees throughout.
Here are some examples of how the right back-office partner can help:
With expert open enrollment support, you can rest assured that your business is compliant with all applicable benefit regulations while providing a smoother experience for your employees. A PEO or HR support partner can help your business move beyond simple box-checking to a thoughtful, people-first benefits strategy that helps you attract and retain top talent.
With the right preparation, proactive communication, and strategic use of partners, you can use open enrollment season to demonstrate your dedication to your employees’ financial health and well-being.
Open enrollment doesn’t have to be a headache. At Stable Rock, we build smart PEO and HR partnerships that help small businesses streamline every step of the process, from compliance and benefits evaluation to employee communication and digital enrollment tools. Our team can handle the heavy lifting so you can stay focused on growth.