An Employer’s Guide to Healthcare Open Enrollment

By: David Ostrowsky

With healthcare open enrollment season right around the corner, there’s a major emphasis on how employees should navigate the process. Is a High-Deductible Health Plan (HDHP) the most prudent option? Will a flexible spending account (FSA) be necessary? What steps are needed if you are expecting a major life change?

But what about employers (i.e., sponsors of self-funded plans)—what do they need to prioritize for the upcoming open enrollment period? Below are some items that would be prudent for such stakeholders to bear in mind as the temperatures drop and the days grow shorter/

Every year during open enrollment, there’s a new wave of regulatory matters to consider. Fall 2025 is no exception. Following the recent passage of the One Big Beautiful Bill Act (“OBBBA”),  plan sponsors—for the sake of mitigating the risk of incurring legal penalties—should take time to look over their Administrative Service Agreements (ASAs), plan documents, stop-loss policies, and handbooks to ensure their provisions thoroughly align with new allowances as well as comply with any modifications to the Affordable Care Act (ACA), ERISA, and HIPAA.

Indeed, the aforementioned OBBBA has ushered in sweeping changes for healthcare law, including the implementation of safe harbors for HDHPs regarding telehealth and Direct Primary Care (DPC): an HDHP can now pay first-dollar for any telehealth or other remote care visit without sacrificing HSA eligibility, while qualifying DPC fees are now considered explicitly compatible with HSAs. To optimally serve their respective participants—both from a financial and privacy perspective—plan sponsors should be fully aware of how their documents can be optimally positioned in light of these changes. For good measure, over the past year, individual states may have also imposed specific coverage mandates that warrant plan document reviews for ensuring adherence to such regional requirements.

From a compliance perspective, earlier this summer, the U.S. Department of Health and Human Services’ Office for Civil Rights proposed regulations to modify the HIPAA Security Rule in an effort to bolster cybersecurity protections and update security standards for electronic protected health information (ePHI). As such, it would be advisable for covered entities and business associates of healthcare plans to stay current on the proposed rules’ status to make sure they are complying with current standards for safeguarding ePHI. Meanwhile, conducting a comprehensive review of one’s stop-loss policy prior to open enrollment is vital for ensuring compliance with any relevant changes to ERISA and potentially, developments to insurance regulations at the state level. In sum, changes in federal or state regulations could impact terms of stop-loss coverage, so a review can be essential for ensuring alignment with current legal requirements as well as avoiding potential penalties. Also, from a financial perspective, a stop-loss policy review can prompt an employer to consider modifying specific policy limits based on evolving needs of the workforce or escalating healthcare costs.

Additionally, during the open enrollment period, plan fiduciaries can work towards safeguarding against breaches of fiduciary duty by communicating plan changes to participants, who can subsequently make informed decisions. It is also a time when sponsors of self-funded plans can audit third-party vendors who are accountable for administrative functions such as claims processing, network management, and compliance support. It is important to remember that under ERISA, plan sponsors are fiduciaries obligated to act solely in the interest of plan participants and beneficiaries. Fulfilling that obligation involves closely monitoring and auditing the performance and compliance behavior of vendors. By conducting regular audits, plan sponsors can make sure that vendors are responsibly managing plan assets. This is more important now than ever considering the recent spate of fiduciary lawsuits against self-funded healthcare plans.

The above points may sound like merely legal jargon—and in many ways, they are—but participants of employer-sponsored plans, many of whom are cash-strapped and continually stressed with lingering inflation, are looking to maximize every dollar that is deducted from their paychecks for healthcare. The financial well-being of the employee participants and their families—to say nothing of their sacred privacy—is ultimately at stake; thoroughly preparing for open enrollment is one important step to ensure their interests are best served.