Don’t treat open enrollment as an HR admin. It’s a powerful lever to reduce costs, boost retention, and strengthen employee trust.
TL;DR
Open enrollment is right around the corner and with employer health plan costs expected to rise 6.5% in 2026, according to Mercer, affordability thresholds shifting to 9.96% per the IRS, and most employees spending less than 30 minutes reviewing their benefits during open enrollment (SHRM), small business owners can’t afford to take a “set it and forget it” approach.
Here’s what’s changing for 2026, how 2024 data still shapes employee behavior, and how to make open enrollment work for your business, not against it.
Why Open Enrollment Matters More Than Ever in 2026
For many small business owners, open enrollment can feel like a mountain of forms, confusion, and deadlines. But it’s also your biggest opportunity to reinforce company culture, demonstrate care, and strengthen employee retention.
The 2026 plan year brings several shifts that will impact both your benefits budget and your compliance strategy:
| Trend | What It Means for You |
| Health benefit costs rising 6.5% | Employers face the highest cost increase in 15 years, according to Mercer’s 2025 Health Benefit Cost Report. Without plan design changes, that number could approach 9%. |
| ACA affordability threshold increases to 9.96% | The IRS confirmed the new affordability percentage for 2026 plan years. This gives employers slightly more flexibility in setting employee premiums, but pushing costs too far risks morale and retention. |
| Employee engagement remains low | According to SHRM, 67% of employees spend 30 minutes or less reviewing benefits options. This lack of engagement leads to poor plan choices and post-enrollment confusion. |
| Premiums keep climbing | The KFF Employer Health Benefits Survey 2024 found that the average family premium reached $25,572, a 7% increase over 2023 and the trend isn’t slowing down. |
What 2024 Data Tells Us About 2026 Behavior
Looking at 2024 gives us important insight into what’s ahead:
- Employees aren’t making informed decisions.
Nearly 7 in 10 workers rushed through open enrollment in under 30 minutes (SHRM). That means most employees are missing critical details that could save them money or improve coverage. - Costs outpaced communication.
Even as family premiums rose 7% to $25,572 (KFF), few employers updated how they communicated benefits. Employees noticed and confidence in HR transparency dropped. - Health literacy = retention.
Workers who understand their benefits are 2–3x more likely to stay loyal to their employer, according to Aflac’s Workplace Benefits Report. Clear communication doesn’t just inform, it retains.
Case Study: The 30-Minute Problem
A 65-person professional services company discovered that only 12% of employees changed benefits selections year over year; most clicked through enrollment in under 20 minutes.
igniteHR introduced bite-sized explainer videos, a one-page plan comparison sheet, and virtual “Ask HR Anything” sessions.
The result: voluntary benefits participation rose 38%, and HR questions dropped 40%.
Moral of the story: when benefits communication is short, visual, and conversational employees actually listen.
How Business Owners Can Win in 2026 Open Enrollment
- Start earlier than you think.
Begin communicating 45–60 days before enrollment. Use reminders, quick videos, and simplified guides.
→ [Internal Link: igniteHR Open Enrollment Prep Checklist] - Tell the “why” and Tell a Story
Be transparent about cost increases and contribution shifts. Employees appreciate honesty more than perfection. Make benefits real by highlighting true benefit use cases from employees. For example: How telehealth services helped a mom at 3am get answers for their sick son. - Audit your affordability.
Use the new 9.96% ACA threshold to review premium contributions against safe harbor standards. - Simplify education.
Host short, focused Q&A sessions. Replace jargon-heavy presentations with one-page summaries or infographics. - Show your investment.
Remind employees what you contribute toward total compensation. In times of rising costs, transparency builds trust and shows you are thinking in terms of total compensation.
Looking Ahead: The 2026 Mindset Shift
As benefit costs climb and compliance rules evolve, businesses that win are those that treat open enrollment as a strategic engagement moment, not just an administrative deadline. If your employees are confused, it’s not a benefits problem, it’s a communication problem. And that’s exactly where igniteHR can help.
igniteHR helps small and midsized businesses simplify their open enrollment and communication so open enrollment works for everyone. Check Out our Open Enrollment Toolkit here.
Want help simplifying open enrollment this year?
Book a no-obligation, free strategy call with igniteHR and let’s make HR simple.
FAQs
Q: When should I start preparing for 2026 open enrollment?
By August 2025 — carriers begin releasing rates and plan updates midsummer.
Q: What’s the ACA affordability threshold for 2026?
The IRS set it at 9.96% of household income for plan years beginning in 2026 (IRS / Risk Strategies).
Q: How can I boost employee engagement in benefits?
Short videos, infographics, and interactive Q&A sessions outperform long slide decks every time.
Q: What’s the difference between active and passive enrollment?
Active enrollment requires employees to reselect or waive benefits annually. Passive rolls over prior choices. Active enrollment improves understanding but needs more planning.
Q: How long should open enrollment run?
Plan for 4–8 weeks of communications with 6–8 touchpoints. Your actual enrollment window may be shorter (2–4 weeks), but typically 2 weeks.
Q: Should we offer one-on-one counseling?
Yes. Research shows that over one-third of employees want real conversations before making benefit decisions (Aflac WorkForces Report).
Q: How do I measure ROI on benefits?
Track changes in plan adoption, participation rate, support volume, and employee satisfaction. A strong program often lowers claims and increases retention.
Your Next Step as a Business Owner
Open enrollment isn’t about paperwork, it’s about protecting your people and your profits.
If managing benefits communication feels overwhelming, igniteHR can help. We’ll plan, manage, and run your open enrollment so you can focus on leading your business and your team can make confident benefit choices.
Contact igniteHR to learn how our HR-as-a-Service solutions can simplify your open enrollment season.
About the Author
Misty Johnson is the founder and CEO of igniteHR, a full-service HR consulting firm headquartered in Omaha, NE. With over 20 years of HR leadership experience – navigating people and business, she’s your go-to guide for making HR less scary and more human. She helps small and mid-sized businesses build cultures of winning and belonging while staying compliant and competitive.
When she’s not helping clients train leaders, Misty specializes in aligning people strategy with business goals so leaders can focus on growth.
Misty helps clients create cultures of winning and belonging. When she’s not doing that, she can usually be found at the movie theater justifying her popcorn habit. She’s also a gamer (playing with family and friends) who believes HR is a bit like an RPG—you need the right strategy, the right gear, and occasionally a respawn button. Her unofficial mantra? “I can do this all day”, because whether it’s HR challenges or that final boss fight, she’s in it for the long haul.
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igniteHR is a full-service HR firm headquartered in Omaha, NE, specializing in practical, people-first HR solutions for small and mid-sized businesses. We make HR simple and impactful so you can focus on what matters—growing your business and your people.
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Last Updated: 10/14/25