Open Enrollment Season

When your US HR manager mentions “we need to prepare for open enrollment,” do you understand the cascading compliance requirements, tight deadlines, and significant financial implications this represents? For international companies operating in the United States, benefits enrollment season represents one of the most critical—and complex—annual HR responsibilities, with implications extending far beyond simple paperwork.

Open enrollment marks the designated period when employees can enroll in health insurance and other benefits for the upcoming plan year. Unlike many countries where government-mandated healthcare simplifies employer responsibilities, the US employer-sponsored benefits system requires sophisticated administration, strict compliance management, and strategic communication to navigate successfully.

As experts in facilitating smooth US operations for international companies, Foothold America has guided hundreds of global businesses through the intricacies of American benefits enrollment. This comprehensive guide reveals the realities of enrollment season, from federal marketplace deadlines to employer-sponsored plan requirements, providing practical frameworks for international companies managing US workforce benefits.

Understanding US Open Enrollment: The Foundation

Before diving into specific timelines, international employers need to understand what “open enrollment” means in the American benefits context and why it creates such concentrated administrative intensity.

What Is Open Enrollment?

Open enrollment (OE) refers to the designated annual period when employees can enroll in, modify, or renew their health insurance and other voluntary benefits for the upcoming plan year. Outside this window, employees generally cannot make benefits changes unless they experience a Qualifying Life Event (QLE)—major circumstances like marriage, birth of a child, divorce, or loss of other coverage that trigger Special Enrollment Periods (SEPs).

This restrictive system exists because health insurance operates on risk-pooling principles. Allowing year-round enrollment would enable people to purchase insurance only when needing medical care, undermining the insurance model. The annual open enrollment window balances employee flexibility with insurance system sustainability.

Three Distinct Open Enrollment Systems

The US operates three separate open enrollment systems that international employers must understand:

Employer-Sponsored Open Enrollment: Companies offering group health insurance set their own open enrollment periods. Approximately 40-60% of businesses align with calendar-year plan years, typically conducting enrollment several weeks before coverage begins. Employer timing flexibility allows businesses to coordinate with fiscal years, benefits consultants’ schedules, and operational calendars. Open enrollment can occur in any month of the year, though many companies plan renewals effective January 1st.

Federal Marketplace (ACA) Open Enrollment: The Health Insurance Marketplace, also known as the Affordable Care Act (ACA) exchange or HealthCare.gov, runs open enrollment from November 1, 2025 through January 15, 2026 for individuals purchasing their own coverage. According to the Centers for Medicare & Medicaid Services, individuals who enroll by December 15 receive coverage starting January 1, 2026.

Medicare Annual Enrollment Period (AEP): Medicare enrollment for Americans age 65 and older runs October 15 through December 7 annually. While less relevant for most employer-sponsored plans, companies with older employees approaching Medicare eligibility should understand this timeline.

For international companies managing US employees, the employer-sponsored open enrollment system represents the most relevant—and administratively intensive—annual responsibility. Understanding how this integrates with comprehensive US employee benefits packages becomes essential for effective benefits administration.

The Complexity of Carrier Renewals

The open enrollment process becomes significantly more complex when renewal rates from current carriers show substantial increases. At that point, companies often go out to market to compare alternative carriers—for example, changing from United Healthcare to Aetna. This carrier comparison process can take several weeks to complete.

Many carriers don’t publish their January rates until the beginning of October, which compresses planning timelines considerably. This timing constraint means companies must move quickly once rates are released to evaluate options, make decisions, and implement changes before the effective date.

Strategic Timing of Benefits Enrollment

While federal law doesn’t mandate specific employer-sponsored open enrollment timing, strategic operational, administrative, and market factors influence when companies conduct their enrollment periods.

Calendar Year Plan Alignment

Approximately 40-60% of employer-sponsored health plans operate on calendar-year cycles (January 1 through December 31). This alignment provides several advantages: simplified administration with tax year coordination, easier employee understanding with calendar-year deductibles and out-of-pocket maximums, and streamlined compliance reporting aligned with annual requirements.

Planning typically begins 2-3 months before the effective date, depending on the size of the company. Generally, companies conduct open enrollment 4-6 weeks in advance of the effective date. Conducting enrollment too far in advance isn’t recommended, as employees leave and are hired during extended periods, requiring constant enrollment updates.

Administrative Processing Requirements

The enrollment timeline accounts for complex administrative processes that must occur between enrollment and coverage activation:

Carrier Submissions: Employers must submit final enrollment data to insurance carriers by specific deadlines to ensure coverage activation on the effective date. Some carriers may allow later submissions, but activation or membership cards may arrive after the effective date, providing only retroactive coverage. This happens because insurers experience extremely high volume during enrollment season. Delayed enrollment creates stress for employees who lack coverage confirmation.

Payroll System Updates: Benefits deductions must be programmed into payroll systems, tested for accuracy, and coordinated with the first pay periods of the new year.

Benefits Communication Production: Open enrollment requires extensive employee communication materials—benefits guides, plan comparison tools, decision support resources, and personalized enrollment statements. These materials require weeks or months to produce, particularly when incorporating plan changes or new benefit offerings.

Vendor Coordination: Companies often work with benefits brokers, third-party administrators (TPAs), and enrollment platform providers. Coordinating across multiple vendors requires an adequate timeline buffer.

Avoiding Holiday Disruptions

Enrollment timing strategically precedes Thanksgiving and year-end holiday disruptions. The period from Thanksgiving through New Year’s Day is marked by a dramatic reduction in workplace focus, high rates of vacation and sick leave usage, and competing priorities. Many employees run the risk of losing leave if it isn’t allowed to roll over, so companies often see extensive leave-taking at year-end. Completing enrollment before Thanksgiving prevents these disruptions from derailing the process.

For international companies learning to navigate American workplace culture and holiday expectations, understanding enrollment timing as strategically designed around American holiday patterns provides important cultural context.

General Enrollment Timeline: Key Dates and Deadlines

International employers should follow this general timeline structure, adjusting based on their specific effective date and company size:

8-12 Weeks Before Effective Date: Pre-Enrollment Preparation

Launch Employee Communication Campaign: Begin communicating about upcoming open enrollment at least 8 weeks before the effective date. Early communication increases employee engagement and reduces last-minute questions.

Finalize Benefits Guides: Complete all print and digital benefits materials. These guides should detail plan options, costs, coverage details, and comparison tools to help employees make informed decisions. Ensure all materials include carrier-provided caveat language, which has been fully vetted for compliance.

Test Enrollment Systems: Conduct thorough testing of online enrollment platforms, ensuring proper integration with payroll systems and accurate display of plan options and costs.

Train HR Staff and Managers: Ensure all personnel who will answer employee questions receive comprehensive training on plan options, enrollment procedures, and common decision scenarios.

6 Weeks Before Effective Date: Active Enrollment Period

The most common employer-sponsored open enrollment window is 2-4 weeks, typically occurring approximately 6 weeks before the effective date. The specific duration depends on company size—larger organizations may need longer enrollment periods.

Week 1: Launch enrollment with company-wide announcements, benefits fair events (virtual or in-person), and individual employee meetings. Front-load communication and support during this week to catch early enrollers and identify system issues.

Week 2-3: Maintain consistent communication with enrollment reminders, deadline countdowns, and targeted outreach to employees who haven’t enrolled. Monitor enrollment rates and troubleshoot problems promptly.

Final Week: The final enrollment week requires intensive support as procrastinators rush to complete elections. Extended HR availability and clear deadline communication become critical.

Enrollment Deadline: Most employers set specific cut-off times (commonly 4:30 PM or 11:59 PM local time) for the final enrollment deadline. Missing this deadline typically means employees default to their previous year’s elections or, for new hires, potentially face coverage gaps.

4-6 Weeks Before Effective Date: Post-Enrollment Processing

Data Validation and Error Correction: Audit enrollment data for errors, duplications, or inconsistencies. Contact employees to resolve problematic elections before carrier submission deadlines.

Carrier Data Submission: Submit finalized enrollment data to insurance carriers. Carriers typically require data submission 4-6 weeks before coverage effective dates to process enrollments and produce ID cards.

Payroll System Programming: Program benefit deductions into payroll systems for the new plan year. Test thoroughly to ensure accurate deduction amounts.

Employee Confirmation Communications: Send employees confirmation statements detailing their benefit elections, coverage effective dates, payroll deduction amounts, and key coverage information.

Period Before Implementation: Pre-Implementation Finalization

Benefits ID Card Distribution: Insurance carriers mail benefits ID cards to employees. While carriers aim to deliver cards before the effective date, this isn’t always possible due to high processing volumes during enrollment season.

Final Q&A Support: Provide continued support for employee questions about their new coverage, particularly as ID cards arrive and questions emerge.

Dependent Verification: Many employers conduct dependent eligibility verification during this period, requiring employees to provide documentation (marriage certificates, birth certificates) proving dependent relationship and eligibility.

New Hire Onboarding Integration: Update new hire benefits materials to reflect new plan year options and costs, ensuring seamless onboarding.

For international companies managing these timelines, partnering with experienced US employment services providers can ensure compliance with complex deadlines while minimizing administrative burden on international HR teams unfamiliar with US benefits systems.

Federal and State-Specific Requirements

While employer-sponsored open enrollment timing remains largely discretionary, federal and state regulations create compliance requirements that international employers must understand.

ACA Employer Mandate Compliance

The Affordable Care Act (ACA) requires Applicable Large Employers (ALEs)—generally companies with 50 or more full-time equivalent employees—to offer qualifying health coverage to full-time employees (defined as working 30+ hours per week) and their dependents or potentially face IRS penalties.

According to Fisher Phillips legal analysis, these penalties will increase significantly in 2026 under Revenue Procedure 2025-26. For 2026, the penalty for not offering coverage increases to $2,970 per full-time employee (minus the first 30 employees), while the penalty for offering inadequate coverage rises to $4,460 per affected full-time employee.

Open enrollment represents the primary mechanism for ALE compliance. Employers must:

Offer Qualifying Coverage: Plans must meet minimum value (covering at least 60% of total healthcare costs) and affordability standards (employee premium contributions cannot exceed 9.02% of household income for 2025).

Maintain Documentation: Preserve detailed records of coverage offers, employee elections or declinations, and coverage terms. IRS audits require substantiating documentation for penalty assessments or refutations.

Distribute Required Notices: Provide Summary of Benefits and Coverage (SBC) documents explaining plan terms in standardized formats, and issue annual notices about marketplace coverage options to all employees.

For international companies evaluating comprehensive US employment costs, understanding ACA compliance requirements becomes essential for accurate budget planning and avoiding unexpected penalties.

ERISA Requirements

The Employee Retirement Income Security Act of 1974 (ERISA) governs employer-sponsored benefit plans, including health insurance. ERISA imposes several open enrollment-related requirements:

Summary Plan Descriptions (SPDs): Employers must provide comprehensive plan descriptions detailing coverage terms, employee rights, claim procedures, and administrative information. Updated SPDs must be distributed when making material plan modifications.

COBRA Notices: The Consolidated Omnibus Budget Reconciliation Act (COBRA), part of ERISA, requires employers with 20+ employees to offer continued health coverage to employees and dependents after qualifying events like termination or reduced hours. Understanding COBRA requirements becomes essential during open enrollment when employees experience qualifying events.

Fiduciary Responsibilities: ERISA designates employers as plan fiduciaries, requiring them to act in participants’ best interests. This includes providing accurate benefits information, processing enrollments promptly, and maintaining plan assets properly.

HIPAA Privacy Rules: The Health Insurance Portability and Accountability Act (HIPAA) requires protecting employee health information privacy. Enrollment processes must incorporate appropriate privacy safeguards.

State-Specific Requirements

Several states impose additional requirements affecting open enrollment.

State-Mandated Benefits: Some states require health plans to cover specific services beyond federal minimums. California, for example, mandates coverage for fertility preservation, while several states require mental health parity exceeding federal standards.

Paid Family Leave Programs: States including California, New York, New Jersey, and others operate paid family and medical leave programs funded through payroll deductions. While these are state-run rather than employer-sponsored programs, they may require enrollment coordination and employee communication during open enrollment to ensure employees understand their coverage and contribution requirements.

State Continuation Coverage: Some states require continuation coverage (similar to COBRA) for employers too small for federal COBRA requirements. These state “mini-COBRA” laws affect enrollment procedures for smaller employers.

Domestic Partner Coverage: Several states require offering health coverage to registered domestic partners equivalent to spousal coverage, affecting enrollment system configuration and communication materials.

International employers operating across multiple states should consult benefits experts, such as Foothold America, to ensure state-specific compliance.

Benefits Types and Enrollment Considerations

Open enrollment typically encompasses multiple benefit types beyond health insurance. International employers should understand the full scope of benefits requiring enrollment administration.

Health Insurance (Medical, Dental, Vision)

Health insurance represents the most complex and expensive benefit requiring enrollment management:

Plan Structure Options: Employers typically offer multiple plan options—commonly PPO (Preferred Provider Organization), HMO (Health Maintenance Organization), HDHP (High Deductible Health Plan), and EPO (Exclusive Provider Organization) structures. Each has different cost-sharing models, provider networks, and coverage rules.

Family Coverage Tiers: Most plans offer multiple coverage tiers—employee-only, employee-plus-spouse, employee-plus-child(ren), and family coverage. Pricing varies significantly across tiers, with family coverage typically costing 3-4 times individual coverage.

Dependent Eligibility: Employers must verify dependent eligibility, typically covering spouses or domestic partners and children through age 26 (following ACA requirements). Documentation requirements prevent fraud while respecting employee privacy.

Dental and Vision Separation: Unlike many international markets where dental and vision coverage integrate with medical insurance, US employers typically offer these as separate voluntary benefits with separate premiums and enrollment decisions.

For international companies designing competitive US employee benefits packages, understanding these structural complexities helps create offerings that attract talent while managing costs effectively.

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)

Tax-advantaged savings accounts represent important benefit components requiring enrollment:

Health Savings Accounts (HSAs): Available only to employees enrolled in High Deductible Health Plans (HDHPs), HSAs allow pre-tax contributions that can be used for qualified medical expenses. For 2026, the IRS sets contribution limits (typically around $4,150 for individuals and $8,300 for families, though 2026 limits haven’t been published as of October 2025). HSA funds roll over year-to-year and remain with employees even after leaving employment.

Flexible Spending Accounts (FSAs): FSAs allow pre-tax contributions for healthcare or dependent care expenses. Unlike HSAs, FSA funds generally follow “use-it-or-lose-it” rules, though employers may offer either a grace period (typically 2.5 months into the new year) or allow carrying over up to $640 (2025 limit) to the following year. FSAs require annual re-enrollment—employees must actively elect FSA participation each year.

Dependent Care FSAs: Separate from healthcare FSAs, dependent care accounts allow pre-tax savings for childcare expenses. For 2026, limits typically allow $5,000 annually for married couples filing jointly or $2,500 for individuals.

These accounts require careful employee education since incorrect elections create tax implications and potentially costly mistakes. Many employees struggle to estimate annual medical expenses accurately, requiring decision support tools and educational resources during enrollment.

Group Life and Disability Insurance

Enrollment typically includes life and disability insurance options:

Basic Group Life Insurance: Most employers provide basic group life insurance coverage (commonly 1-2 times annual salary) at no employee cost as part of core benefits packages.

Supplemental Group Life Insurance: Employees can purchase additional group life coverage during open enrollment. Open enrollment may allow guaranteed-issue coverage up to certain limits (commonly $50,000-$100,000) without medical underwriting, while higher amounts require evidence of insurability.

Spouse and Dependent Group Life Coverage: Many employers offer voluntary group life insurance for family members, requiring enrollment elections during open enrollment.

Group Short-Term and Long-Term Disability Insurance: Group disability coverage replaces income during illness or injury. Some employers provide basic group disability coverage at no employee cost, while others offer voluntary purchase options. Like supplemental group life insurance, open enrollment may provide guaranteed-issue opportunities.

Voluntary Benefits

Enrollment increasingly includes diverse voluntary benefits:

Accident Insurance: Pays fixed benefits for accident-related injuries, helping cover out-of-pocket costs like deductibles and copays.

Critical Illness Insurance: Provides lump-sum payments upon diagnosis of specified serious illnesses like cancer, heart attack, or stroke.

Hospital Indemnity Insurance: Pays fixed daily benefits for hospital stays, helping offset costs not covered by major medical insurance.

Legal Plans: Provide access to attorneys for various personal legal matters at reduced costs.

Pet Insurance: Increasingly popular voluntary benefit covering veterinary expenses for employees’ pets.

Identity Theft Protection: Offers monitoring and resolution services for identity theft and fraud.

Student Loan Assistance: Some employers now offer student loan repayment benefits or refinancing assistance as voluntary enrollment options.

The proliferation of voluntary benefits increases enrollment complexity while providing opportunities for employees to customize their total benefits packages. For international companies, understanding which voluntary benefits are common in your industry helps create competitive offerings while managing administrative complexity.

Compliance Pitfalls and Risk Management

Enrollment creates concentrated compliance risk if not managed properly. International employers should understand common pitfalls and implement preventive measures.

Critical Compliance Risks

Late Carrier Data Submission: Missing carrier submission deadlines can result in employees lacking coverage on the effective date, creating liability exposure and employee relations problems. Build buffer time into your enrollment timeline ensuring carrier deadlines are met even with unexpected delays.

Inadequate Notice Distribution: Failing to provide required notices—Summary of Benefits and Coverage (SBC), COBRA rights, marketplace coverage options—creates regulatory violation risk. Use technology-based distribution tracking confirming notice receipt.

Discriminatory Practices: Benefits offerings must comply with anti-discrimination rules under ACA, ERISA, and other regulations. Plans cannot discriminate in favor of highly compensated employees, and enrollment procedures must apply consistently across employee populations.

COBRA Administration Failures: Enrollment periods often coincide with COBRA qualifying events (employees terminating, reducing hours, or aging off dependent coverage). Failing to provide timely COBRA notices creates significant liability. Understanding COBRA requirements comprehensively prevents costly mistakes.

Dependent Verification Failures: Enrolling ineligible dependents increases costs and creates potential fraud issues. Implement systematic verification processes while respecting employee privacy.

ACA Reporting Errors: Employers must file annual ACA reports (Forms 1094-C and 1095-C) documenting coverage offers. Enrollment data feeds these reports, making enrollment accuracy essential for compliance.

Risk Mitigation Strategies

Compliance Checklist Development: Create comprehensive compliance checklists covering all regulatory requirements, reviewing and updating annually as regulations evolve.

Expert Review: Have benefits experts or attorneys review enrollment materials, procedures, and plan documents annually, identifying compliance risks before they materialize. Ensure employers include carrier-provided caveat language in all communications, as these will have been fully vetted for compliance.

Documentation Systems: Maintain meticulous documentation of all enrollment activities—notices distributed, employee elections, system access logs, and exception handling. This documentation proves invaluable during audits or disputes.

Training Investment: Ensure HR staff conducting enrollment thoroughly understand compliance requirements, not just administrative procedures. Compliance knowledge prevents mistakes rather than just documenting them.

Vendor Partnership: For international companies without deep US benefits expertise, partnering with experienced PEO providers or benefits consultants transfers much compliance risk while providing access to specialized knowledge.

Special Considerations for International Employers

International companies face unique enrollment challenges stemming from unfamiliarity with US benefits systems and cultural differences in healthcare expectations.

Cultural Differences in Healthcare Expectations

International employers must understand that American employees’ healthcare expectations differ dramatically from those in countries with universal healthcare systems:

Personal Financial Responsibility: Unlike single-payer healthcare systems, American employees bear substantial healthcare costs through deductibles, copays, and coinsurance. According to the Kaiser Family Foundation’s 2024 Employer Health Benefits Survey, the average deductible for single coverage among employees with a deductible is $1,787 in 2024. High Deductible Health Plans (HDHPs) have even higher deductibles—the Bureau of Labor Statistics reports that the median annual deductible for private industry workers in HDHPs was $2,750 in 2024. Copays typically range from $10 to $50 for primary care visits according to multiple healthcare sources, while coinsurance commonly requires employees to pay 20% of costs after meeting their deductible. This cost-sharing makes benefits selection financially consequential in ways foreign to employees from universal healthcare countries.

Employer-Provided Coverage as Standard: Americans expect employers to provide comprehensive health insurance as a core employment benefit, not an optional perk. The KFF 2024 survey found that average annual premiums reached $8,951 for single coverage and $25,572 for family coverage, with employers typically covering approximately 84% of single coverage premiums and 75% of family coverage premiums. This cultural expectation means competitive benefits packages are essential for talent acquisition and retention in ways that differ from countries where healthcare is government-provided.

Provider Network Importance: American healthcare operates through complex provider networks—PPOs (Preferred Provider Organizations) offering broad choice with higher costs, HMOs (Health Maintenance Organizations) requiring primary care physician coordination with lower costs, and EPOs (Exclusive Provider Organizations) limiting to network providers. According to the KFF 2024 survey, 48% of covered workers are enrolled in PPOs, 27% in HDHPs with savings options, 13% in HMOs, and 11% in POS (Point of Service) plans. Employees evaluate plans partly based on whether their preferred doctors and hospitals participate, creating selection complexity unknown in many international markets.

Prescription Drug Coverage: Pharmacy benefits represent a distinct, complex component of US health coverage. Americans scrutinize formularies (lists of covered medications), tier structures (generic, preferred brand, non-preferred brand), and specialty drug provisions when selecting plans—considerations largely absent in countries with government-negotiated drug pricing. Mercer research shows that prescription drug spending remains the fastest-growing component of health benefit costs, with drug benefit costs per employee rising 7.2% in 2024.

For international companies, understanding these cultural differences helps contextualize why American employees invest significant time and emotion in benefits enrollment compared to employees in countries where healthcare is less employer-dependent.

Managing Cross-Border Employee Benefits

International companies often employ several categories of cross-border workers requiring specialized enrollment consideration:

Expatriates from Home Country: Employees relocated from international headquarters to US operations may require coordinated benefits spanning both countries. Consider whether home-country benefits continue, supplement US coverage, or terminate upon US relocation. Coordinate enrollment timing between countries to prevent coverage gaps.

Local US Hires: American employees expect standard US benefits packages. Ensure your offerings meet local market standards rather than attempting to extend home-country benefit structures that may not translate effectively to the US market.

Frequent International Travelers: Employees who travel frequently or for extended periods require specialized coverage addressing cross-border healthcare access. Standard US plans may have limited international coverage, available for emergencies only, requiring supplemental expatriate insurance or international provider networks.

Remote International Workers: With increasing remote work, some international employees may work remotely for US entities while remaining in their home countries. These employees typically aren’t eligible for US employer-sponsored health insurance, requiring clear communication about benefits eligibility and alternative options in their resident countries.

For companies managing these complexities, specialized international expansion services provide expertise in coordinating benefits across borders while maintaining compliance in multiple jurisdictions.

Language and Communication Considerations

While English proficiency varies among American workers, benefits enrollment materials should accommodate diverse linguistic and educational backgrounds:

Plain Language Requirements: Federal regulations under ERISA (Employee Retirement Income Security Act) require benefits communications use plain language understandable to average plan participants. Avoid jargon, define technical terms, and use clear, straightforward explanations.

Translation Services: For workforces including significant non-English-speaking populations, provide enrollment materials in relevant languages—at minimum, Spanish. Most carriers have documents available in Spanish and other languages. While not federally mandated for all employers, this accommodation improves enrollment quality and demonstrates inclusion.

Visual Communication: Use charts, tables, comparison tools, and infographics to convey complex information visually, accommodating varied learning styles and literacy levels.

Multiple Format Options: Provide both detailed comprehensive guides for employees wanting exhaustive information and simplified quick-reference materials for those seeking essential highlights only.

For international employers accustomed to more uniform linguistic environments, American workforce diversity requires more sophisticated, multi-layered communication approaches than might be necessary in more linguistically homogeneous markets.

Your Path Forward

Navigating benefits enrollment represents more than administrative compliance—it’s an opportunity to demonstrate commitment to employee well-being that strengthens retention, enhances your employer brand, and positions your company competitively in the American talent market.

At Foothold America, we’ve helped hundreds of international companies navigate the complexities of US benefits administration, from initial enrollment strategy through ongoing compliance management. Our deep understanding of American benefits systems, combined with experience supporting companies across diverse industries and growth stages, enables us to guide international employers toward enrollment success.

Whether you’re establishing your first American employees through our Employer of Record Service, managing a growing team via PEO+ Cross-Border Support™, or building comprehensive operations through our People Partnership Service™, we provide the benefits expertise and administrative infrastructure necessary for seamless enrollment management.

Ready to approach benefits enrollment with confidence and strategic clarity? Contact our expansion experts to discover how Foothold America’s comprehensive services can transform benefits administration from an annual crisis into a competitive advantage that attracts and retains top American talent.