Open enrollment compliance isn’t just a benefits department problem. It’s a business risk, and most employers don’t find that out until they’re staring down a Department of Labor letter or an angry email from an employee who missed a deadline that nobody told them about.
Fall enrollment season is coming up fast. Here’s what’s tripping employers up, and what to fix before your window opens.
The Real Cost of Open Enrollment Compliance Mistakes
A missed COBRA notice. A late ACA filing. An outdated Summary Plan Description that doesn’t match what you’re actually offering. None of these sound catastrophic on their own.
Add them up and you’ve got penalties, employee grievances, and a payroll team scrambling to fix errors after coverage has already started.
Some real numbers to consider:
- ERISA notice violations can run $100 per day, per employee, until corrected.
- Failure to file accurate ACA information returns can trigger IRS penalties per return, not per company.
- COBRA notice failures open the door to statutory damages and lawsuits, on top of the coverage cost itself.
These mistakes are rarely one big error. They’re a stack of small ones that compound because nobody owned the checklist.
Where Employers Slip Up During Open Enrollment
The same handful of enrollment compliance mistakes show up year after year, across companies of every size.
Missing or late required notices. Summary of Benefits and Coverage, Summary Plan Descriptions, COBRA election notices, and Medicare Part D creditable coverage notices all have specific timing rules. Miss one and you’re exposed, even if the plan itself is compliant.
Inconsistent employee communication. If your enrollment portal, your printed materials, and what HR tells employees verbally don’t match, you’ve created a documentation problem, and a compliance gap, for yourself.
ACA reporting gaps. Employers with 50 or more full-time equivalent employees still need to track offer of coverage data all year, not just scramble for it in January when 1095-C forms are due. The IRS sets the filing deadlines and penalty structure, and our 2026 Tax Facts guide breaks down the thresholds you need on your radar now.
Skipping the benefits and payroll sync. Deduction codes that don’t update when a plan changes, or new hires who get quoted the wrong rate because payroll and benefits data weren’t talking to each other. This is exactly the kind of breakdown we cover in Mastering Employee Benefits: A Dynamic HR Blueprint.
If your company offers a retirement plan alongside health benefits, don’t forget the rules layered on top by the CARES Act and SECURE Act. Enrollment season is when most employees actually pay attention to their retirement options, so this is your window to get it right.
Multi-State Employers Face Extra Open Enrollment Compliance Risk
If you’ve got employees in more than one state, staying on the right side of the rules gets harder, not easier.
State-level mandates on paid leave, continuation coverage, and disclosure requirements don’t line up neatly with federal rules. What satisfies ERISA in New Jersey might not satisfy an additional state requirement for an employee working remotely from New York.
We wrote about this exact overlap in The Truth About Multi-State Payroll Compliance, and the same logic applies here. One enrollment process, applied uniformly across states without checking local requirements, is how well-meaning employers end up out of compliance without ever realizing it.
The U.S. Department of Labor publishes updated ERISA and COBRA guidance, and it’s worth a review before your enrollment window opens, especially if your workforce has grown into new states this year.
Building an Enrollment Checklist That Actually Works
Here’s the thing. Staying compliant during enrollment only works if someone owns the checklist and it lives somewhere other than your head.
Break your benefits compliance checklist into three windows so nothing slips through:
Before enrollment opens:
- Confirm SPDs and SBCs reflect this year’s actual plan changes
- Verify COBRA notice templates and mailing addresses are current
- Cross-check payroll deduction codes against new plan rates
- Pull a current census to confirm ACA full-time equivalent counts
During enrollment:
- Track who has and hasn’t enrolled, with automated reminders instead of manual follow-up
- Keep a documented record of every notice sent and when
After enrollment closes:
- Reconcile enrollment elections against payroll deductions before the first affected paycheck runs
- File any required state or federal reporting on time, not the week it’s due
Run through those three windows every year and ACA compliance stops being a scramble.
This is exactly where HRIS and benefits administration tools earn their keep. When your systems are integrated, enrollment elections flow straight into payroll without someone re-keying data by hand. That’s how you catch a mismatched deduction before it hits a paycheck instead of after. Our piece on HRIS: Redefining Efficiency in Human Resources Management covers what integrated systems actually save you in hours and errors.
What to Do Before Your Enrollment Window Opens
Open enrollment compliance isn’t something you fix in a weekend once notices are already late. It’s built by having the right systems, the right data flow between payroll and benefits, and a real owner for the checklist.
If your current process depends on spreadsheets, email chains, and someone remembering what got sent last year, that’s your sign to change it before this year’s window opens. PayDay Employer Services handles the integration between benefits administration and payroll so your enrollment data is accurate the first time, not fixed after the fact. Request a quote and we’ll walk you through what a compliant, integrated enrollment process actually looks like for your company.
Ready to Get Started?
Enrollment season doesn’t wait, and neither should your compliance review. If you want a second set of eyes on your process before your window opens, send us a message and our team will help you get ahead of it.
