# How do I run open enrollment at a small company?

Source: https://www.getprescience.com/guides/how-to-run-open-enrollment
Author: Aditya Jain, MD, Cofounder and COO, Prescience
Published: 2026-10-14
Updated: 2026-10-14

Open enrollment is when employees choose or change their benefits for the coming year. I would start planning ten to twelve weeks ahead and reserve two to three weeks for employee elections, adjusting for the plan's deadlines. Check the applicable disclosure duties: a summary of benefits and coverage for each plan, the Medicare Part D notice before October 15, and CHIP and Women's Health and Cancer Rights Act notices where applicable. Here's the week-by-week checklist I'd follow.

- **Suggested window:** 2–4 weeks
- **Required:** Summary of Benefits and Coverage
- **Part D notice:** Before October 15
- **Prescience:** Runs enrollment for you

## What open enrollment is, and what it isn't

Open enrollment is the yearly window, before your plan year starts, when employees can join, leave or change coverage for any reason, add or drop dependents and reset pre-tax elections. Outside it, changes need a [qualifying life event](https://www.getprescience.com/guides/qualifying-life-events). It's tied to your plan year, not the calendar: a plan that renews July 1 holds open enrollment in May or June.

Two decisions shape everything else. **Active or passive enrollment:** active means everyone must make an election (or waive) every year; passive means elections roll over unless someone changes them. Active is more work, but it catches outdated dependents and gives you current waivers. Do it at least in any year your plans or prices change. **Who's eligible:** confirm your eligibility rules (hours, waiting period, dependents) before you send anything.

Settle these before week −10, because every later step depends on them:

1. **Plans:** renew as is, change plan options on your current carrier, or move to a new plan. Compare the renewal with at least one alternative; see [why your renewal went up](https://www.getprescience.com/guides/why-did-our-health-insurance-renewal-go-up).
2. **How many options:** one good plan is easier to explain than three. Two options (for example a copay plan and an HSA-eligible plan) is a common middle ground.
3. **Employer contribution by tier:** a percentage or a flat dollar amount for employee-only, employee plus spouse, employee plus children and family.
4. **Eligibility:** minimum hours (30 a week is common), waiting period (no more than 90 days), and which dependents qualify, including domestic partners if you choose to cover them.
5. **Other benefits in the same window:** dental, vision, FSAs, life and disability, so employees elect everything once.

## A week-by-week timeline for a January 1 plan year

**Open enrollment for a January 1 plan year (shift the dates for other plan years)**

| When | What to do | Who |
| --- | --- | --- |
| Week −12 (early October) | Get renewal or new quotes; send the Medicare Part D notice to everyone if you haven't (due before October 15) | Founder or HR, broker or plan provider |
| Week −10 | Decide plans, employer contributions by tier and eligibility rules. Check affordability if you're an applicable large employer | Founder, finance |
| Week −8 | Confirm the employee census and dependents; set the enrollment dates; fix your Section 125 plan document if anything changed | HR, payroll |
| Week −7 | Build the materials: SBC for every plan, per-paycheck costs by tier, a one-page summary, notices | HR, plan provider |
| Week −6 | Announce: what's changing, the dates, and how to enroll | HR |
| Week −5 to −3 | Enrollment window open (2–3 weeks). Hold a 30-minute Q&A in week one; send reminders | Employees, HR |
| Week −3 | Close enrollment; chase anyone missing; collect written waivers | HR |
| Week −2 | Send elections to carriers; reconcile the enrollment report against your census | HR, plan provider |
| Week −1 | Update payroll deductions for the first January paycheck; confirm ID cards | Payroll |
| January | Check the first paychecks and the first invoice against elections; fix errors in the first month | HR, finance |
| Within 60 days after January 1 | File the Part D creditable coverage disclosure with CMS (within 60 days after the plan year starts) | HR |

## Notices you're required to send

These are the federal notices most small employers with a fully insured plan need around open enrollment. Your carrier or plan provider usually supplies the documents; delivering them is still the plan's job. Many employers put them in one annual notices packet with the enrollment materials.

**Required health plan notices (federal)**

| Notice | Who gets it | When |
| --- | --- | --- |
| Summary of Benefits and Coverage (SBC), one per plan option | Every eligible employee and enrolled dependents | With enrollment materials if employees must re-enroll; generally at least 30 days before the plan year if coverage renews automatically, with a special rule for late policy issuance. Within 7 business days of a request |
| Medicare Part D creditable coverage notice | Medicare-eligible employees, spouses, dependents and COBRA members (most employers send it to everyone) | Before October 15 each year, and at enrollment |
| Part D disclosure to CMS | CMS, online | Within 60 days after the plan year starts |
| CHIP premium assistance notice | Employees residing in states offering Medicaid/CHIP premium assistance, whether enrolled or not | Annually |
| Women's Health and Cancer Rights Act notice | Plan participants | At enrollment and annually, if the plan covers mastectomy benefits |
| HIPAA special enrollment rights notice | Employees eligible to enroll | At or before the time they're first offered coverage |
| COBRA general notice | New plan enrollees and spouses (employers with 20+ employees) | Within 90 days of coverage starting |
| Marketplace coverage options notice | All new employees, eligible or not | Within 14 days of hire for employers subject to the FLSA |
| Summary plan description (SPD) and changes | Plan participants | Generally within 90 days of becoming covered; a newly established plan has a 120-day initial deadline. Material changes have separate disclosure deadlines |

An SBC can't run longer than four double-sided pages, and a willful failure to provide one can be fined up to $1,000 per failure, adjusted for inflation, for each affected person. A material modification outside renewal that affects SBC content requires notice at least 60 days before it takes effect. Some states add their own notices, so ask your carrier or plan provider for your state's list.

> **October 15 is close:** If your plan has prescription drug coverage and anyone on it is, or will soon be, eligible for Medicare, the Part D notice is due before October 15 every year, regardless of when your plan year starts. People without creditable coverage who delay Part D can owe a lifetime penalty, which is why the notice matters to them.

Electronic delivery needs its own check. Sending a link to an unused work inbox is not the same as establishing compliant delivery to everyone entitled to a notice. Identify people on leave, COBRA participants and spouses at different addresses, and use the applicable disclosure rule for each document. Retain the version sent, recipient group, delivery date and evidence of distribution. I would also verify that a person who requests a paper SBC can receive it free of charge.

## Setting contributions: a worked example

Employees decide almost entirely on two numbers: what comes out of their paycheck and what a visit costs. Work out the paycheck number for each tier before you announce anything.

**A 12-person company: 100% for employees, 50% for dependents (illustrative)**

Hypothetical monthly premiums of $770 single and $2,170 family, not actual quotes or averages. Assumes eight single enrollments, four family enrollments and 24 paychecks. The employer pays the full single premium and half the additional $1,400 family cost.

- Single monthly premium: $770
- Family monthly premium: $2,170
- Dependent portion: $2,170 − $770: $1,400
- Employee pays: single: $0
- Employee pays: family, 50% of $1,400: $700 monthly; $350 per paycheck, if eligible for pre-tax treatment
- Employer monthly cost: 8 × $770 + 4 × $1,470: $12,040
- Employer annual cost: $12,040 × 12: $144,480

Put the per-paycheck number for each tier on the first page of your materials. For more on typical splits, see [how much employers pay for health insurance](https://www.getprescience.com/guides/how-much-do-employers-pay-for-health-insurance). Family contributions go through payroll pre-tax with a [Section 125 plan](https://www.getprescience.com/guides/section-125-pre-tax-health-insurance).

## What employees want to know

Skip the jargon. Employees want to know four things: what comes out of their paycheck, what a doctor visit costs, whether their doctors are in network and who to call. A good announcement answers those in the first screen and links to the SBCs for detail. Then:

1. **Announcement (week −6)** What's changing and why, the enrollment dates, the per-paycheck cost table, and how to enroll. One page.
2. **Q&A session (first week of the window)** Thirty minutes, recorded. Walk through one realistic example: a specialist visit and a prescription on each plan.
3. **Reminder (halfway)** Who hasn't enrolled or waived yet. Remind people to check dependents' details and Social Security numbers, which carriers need.
4. **Last call (two days before close)** Explain what happens if they do nothing: under passive enrollment, last year's elections roll over; under active enrollment, they may have no coverage.
5. **Confirmation (after close)** Send each employee their elections and new deduction, and ask them to report errors within a week.

## Common mistakes and edge cases

- **No written waivers.** Carriers check participation, and a waiver that names other coverage also protects you when someone later says they never had the chance.
- **Payroll not updated.** The most common error is the old deduction running into January. Reconcile the first payroll against the enrollment report.
- **HSA elections that don't match the plan.** Switching coverage changes monthly HSA eligibility and the annual limit. Confirm other coverage, Medicare and FSA status; eligible prior-month contributions may still be deposited by the tax filing deadline.
- **Dependents who aged out.** Children turning 26 during the year come off the plan under its rules; send COBRA information when they do.
- **Employees on leave.** Employees on FMLA or other leave still get enrollment materials and can make elections.
- **New hires during the window.** Someone hired in November needs two elections: one for the rest of this plan year and one for next year. Give them both sets of materials.
- **Medicare-eligible employees.** At an employer with fewer than 20 employees, Medicare usually pays first for workers 65 and older. Tell them before they elect; see [employer health insurance and Medicare](https://www.getprescience.com/guides/employer-health-insurance-and-medicare).
- **Remote employees.** Check that the network works where each person lives. See [health insurance for remote employees](https://www.getprescience.com/guides/health-insurance-for-remote-employees).
- **Applicable large employers (50+ full-time equivalents).** Check that the cheapest self-only option is affordable under the ACA with the [affordability calculator](https://www.getprescience.com/tools/aca-affordability-calculator).
- **Mid-year plan changes.** If you're changing carriers outside renewal, the same steps apply on a shorter clock. See [switching health insurance mid-year](https://www.getprescience.com/guides/switch-health-insurance-mid-year).

At Prescience, we design and run your company's health plan, including setup, enrollment and compliance, while you keep your payroll provider. The plan offers simple copays and a broad national PPO network. Use the actual proposal to explain employee contributions and confirm each provider rather than promising a particular payroll deduction or network match.

## Frequently asked questions

**When should open enrollment happen?**

Usually 4–8 weeks before the plan year starts, open for 2–4 weeks. Start planning about 10–12 weeks before the plan year.

**What notices are required at open enrollment?**

Provide SBCs under their enrollment and renewal rules. Check Part D notice timing before October 15, CHIP premium-assistance notice applicability, WHCRA notices for plans covering mastectomy benefits, and any state requirements. These notices do not all share one enrollment deadline.

**How long should the open enrollment window be?**

Two to three weeks works for most small companies: long enough for people to ask questions and check doctors, short enough that they don't forget.

**Do small employers have to send the Medicare Part D notice?**

Yes, if the plan includes prescription drug coverage and anyone covered is eligible for Medicare. It applies regardless of employer size. Most employers send it to everyone to be safe.

**Does open enrollment have to be in November?**

No. It happens before your plan year starts. A plan with a July 1 renewal holds open enrollment in May or June.

**What happens if an employee misses open enrollment?**

Under passive enrollment, their current elections usually roll over. Otherwise they generally wait until next year unless they have a qualifying life event.

**Should we use active or passive enrollment?**

Active enrollment when plans or prices change, or when you haven't confirmed dependents in a while. Passive enrollment is fine in a quiet year.

**Who provides the Summary of Benefits and Coverage?**

For a fully insured plan the carrier writes it; the plan must make sure employees get it. Your plan provider or broker usually sends it with enrollment materials.

**Do we need a broker to run open enrollment?**

No. Many small companies run it with their plan provider or benefits platform. See [do I need a health insurance broker](https://www.getprescience.com/guides/do-i-need-a-health-insurance-broker).

## Sources

- [U.S. Department of Labor, Summary of benefits and coverage](https://www.ecfr.gov/current/title-29/section-2590.715-2715)
- [Medicare.gov, Who pays first?](https://www.medicare.gov/health-drug-plans/coordination/who-pays-first)
- [CMS, Creditable coverage disclosures for Medicare Part D](https://www.cms.gov/medicare/employers-plan-sponsors/creditable-coverage)
- [U.S. Department of Labor, Reporting and Disclosure Guide for Employee Benefit Plans](https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/reporting-annual-disclosure.pdf)
- [U.S. Department of Labor, CHIPRA model employer notice](https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/chipra)
- [29 CFR § 2590.701-6, HIPAA special enrollment periods](https://www.ecfr.gov/current/title-29/section-2590.701-6)
- [IRS Publication 969, HSA contribution timing](https://www.irs.gov/publications/p969)
- [DOL, Reporting and Disclosure Guide](https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/publications/reporting-and-disclosure-guide-for-employee-benefit-plans)