Maximize Value and Compliance During Open Enrollment Season

Open enrollment season is around the corner, and HR professionals face a familiar dilemma: balancing competitive benefits with cost control. 

In fact, of the HR professionals preparing for open enrollment who have encountered at least one challenge, 61% reported balancing cost management with the provision of competitive benefits as an issue, according to SHRM’s June 2025 Current Events Pulse.

A recent SHRM webinar provided guidance on navigating this year’s open enrollment period and featured SHRM HR Knowledge Advisors Jennifer Chang, SHRM-CP; Robyn Hopper, SHRM-CP; and Kim McNeil, SHRM-SCP. With inflation and continual regulatory changes adding even more pressure, the panelists encouraged a strategic, employee-focused approach. To confidently guide their organizations through this critical time, HR professionals need to stay ahead of regulatory changes, explore cost-saving measures, and engage the workforce to support utilization.

Key Regulatory Updates for 2026

Staying compliant is an essential part of successful open enrollment. The IRS has yet to release 2026 contribution limits for 401(k) accounts and flexible spending accounts (FSAs), but there is information available for health savings accounts (HSAs) and high-deductible health plans (HDHPs). 

“To get ready for these updates, we recommend reviewing your historical data to get a sense of the past trends and then using that information to estimate what contributions might look like for 2026,” Hopper said.

Related Article: IRS Announces 2026 HSA, HDHP Limits

Inflation and Rising Health Care Costs 

Inflation continues to push health care premiums higher, leaving HR teams searching for ways to manage budgets without compromising employee satisfaction. Chang suggested a few strategies to help control costs: 

• Offer Tiered Plan Options: Provide employees with a variety of plans, catering to a range of budgets and needs. 
• Promote Telemedicine: Encourage low-cost alternatives such as telemedicine for nonemergency care. 
• Focus on Preventive Care: Set up programs for wellness and chronic condition management to keep claims down and employees healthier. 
• Negotiate Multiyear Contracts: Lock in favorable rates to gain predictability in your plan costs. 
• Explore Alternative Funding Models: Cut costs while offering flexibility in plan design with options such as self-funded health plans. 

These strategies provide a range of solutions for HR teams to mitigate rising health care costs. Alternative funding models, such as a self-funded plan, require more planning and preparation, but can provide savings of anywhere from 7% to 50% per year, according to Hopper. 

Self-funded plans are typically suited for companies with more than five hundred employees that can build the necessary reserves to cover claims, but smaller organizations can explore this option, too. It’s important to analyze past claims data, survey workforce demographics and health profiles, and assess financial reserves to cover the expected claims based on past data, the panelists said. 

Using Data and Smart Design to Optimize Benefits 

HR should regularly examine benefits usage data to evaluate options and ensure the organization’s benefits package is delivering real value. 

“We can also leverage data analytics and predictive modeling to identify cost drivers and design targeted interventions from there,” Chang said. 

Strategies for using data to evaluate benefits include:

• Adopting value-based care models that focus on outcomes, rather than the volume of services provided. 
• Implementing direct primary care systems to streamline costs and quality of care. 
• Introducing reference-based pricing for increased cost transparency. 
• Leveraging predictive analytics to address high-cost health care areas, including prescription drug management. 

Engaging Employees with Benefits Education 

The best benefits plan will still fall short if employees don’t understand or appreciate it. Employees need meaningful education about their benefits to create engagement. Here’s how to effectively share benefits information with workers:

• Start communications early and repeat them frequently across multiple channels. 
• Break content into easy-to-digest formats, such as videos, infographics, and FAQs. 
• Offer hands-on tools, such as savings calculators or guides explaining the differences between various benefits options. 
• Ensure employees on leave also receive communications and have equal access to resources.

Hopper stressed that education can turn on the light bulb for employees weighing their options. 

“I have found that it’s really helpful to share the FSA-eligible expenses list because it is so vast. It’s not just doctor’s visits. Many, many things are covered,” she explained. 

It’s also important to share updates with employees throughout the year, not only ahead of open enrollment season. With comprehensive communication, employees can plan year-round and make the best decisions for their unique situation.

Moving Beyond Compliance to Show Value to Employees

The open enrollment process is more than a compliance task — it’s an opportunity to show employees just how much they are valued. When your workforce feels supported and confident in their benefits, it reinforces the message that they are a vital part of the team.

The three SHRM HR Knowledge Advisors emphasized that open enrollment is also a season for HR professionals to look after themselves. 

“It's not just taking care of employees, but as HR and employers, we have to take care of ourselves, too,” Hopper explained. Whether it’s by scheduling time for self-care or simply setting a reminder to complete your own enrollment, supporting yourself alongside the organization promotes a successful open enrollment season.

Toolkit: Essential Health Care Cost Management Strategies