Avoiding Common Open Enrollment Compliance Mistakes

Open enrollment is one of the busiest and most stressful times of the year for employers. With so many moving parts, it’s easy for mistakes to slip through—and those errors can lead to employee dissatisfaction, compliance issues, and even potential legal liability.

To help you prepare, here’s an open enrollment compliance checklist highlighting five of the most common mistakes employers should avoid.

1. Open Enrollment Mistake: Not Communicating Benefit Changes Clearly

Benefits change from year to year—whether it’s cost-sharing adjustments, coverage updates, or new compliance requirements. Employers should:

• Identify all changes early
• Communicate them in clear, simple language
• Use multiple channels (email, meetings, online portals)
• Update required documents like the Summary Plan Description (SPD)

Clear communication ensures employees understand their benefit options and can make informed elections.

2. Compliance Risk: Failing to Provide Required Health Plan Notices

Employers are responsible for distributing certain notices during open enrollment, including:

• Summary of Benefits and Coverage (SBC)
• Women’s Health and Cancer Rights Act (WHCRA) Notice
• COBRA Notices
• Medicare Part D Disclosure
• HIPAA Privacy and Special Enrollment Notices

Missing notices is one of the most common compliance mistakes during open enrollment. A best practice is to include all notices in the enrollment packet to streamline delivery and ensure compliance.

3. Overlooked Step: Not Distributing Materials to All Eligible Individuals

Open enrollment information must go to more than just active employees. Employers should also reach:

• Newly eligible employees (like those moving to full-time status)
• Employees on leave or furlough who remain benefits-eligible
• COBRA qualified beneficiaries

A multi-channel communication strategy (print, email, intranet) ensures no one is missed, while keeping records of distribution helps protect against disputes.

4. Compliance Pitfall: Underestimating Open Enrollment Election Deadlines

Deadlines are critical for compliance and employee satisfaction. Employers should:

• Clearly define open enrollment start and end dates
• Communicate deadlines often
• Build in time for processing elections and nondiscrimination testing

Missed deadlines can create compliance risks under Section 125 cafeteria plan rules, leading to costly mistakes and employee frustration.

5. Wellness Program Risk: Not Describing Alternative Standards

Employers offering health-contingent wellness programs (e.g., tobacco surcharges, fitness incentives) must comply with HIPAA nondiscrimination rules. This includes:

• Providing a reasonable alternative standard to employees unable to meet the original requirement
• Clearly disclosing alternatives in all plan materials
• Accommodating physician recommendations

Failure to disclose alternatives has already led to lawsuits, making this a key compliance area to monitor.

Open Enrollment Compliance Checklist for Employers

To avoid penalties, confusion, and employee dissatisfaction, employers should:
✔ Communicate all benefit changes early and clearly
✔ Include all legally required notices in enrollment packets
✔ Provide materials to every eligible participant (not just active staff)
✔ Emphasize election deadlines and encourage early enrollment
✔ Ensure wellness programs include clear alternative standards

Final Takeaway

Open enrollment doesn’t have to be a compliance minefield. By proactively addressing these five mistakes, employers can streamline the process, protect against liability, and keep employees informed and satisfied.

Open enrollment isn’t just about forms and deadlines—it’s a chance to reinforce your company’s value to employees. By starting early with tailored benefits, you can turn 2026 open enrollment into a strategic win for your business.

Zinn Insurance is here to bulletproof your business with benefits strategies that actually work—no fluff, no templates, just results.

💬 Need support preparing for 2026? Let’s talk.