For savvy business owners and leadership teams, the employee open enrollment process isn't just a compliance exercise. It's a strategic opportunity.
Too often, employers see employee benefits as necessary costs to be borne. While it's true (and unfortunate) that group health plans now take up a larger portion in your budget line items, it does much more than affect your bottom line. It impacts talent retention, employee satisfaction, risk exposure, and financial planning. In other words, your group benefits package doesn't just benefit your employees, it benefits your organisation. So if you treat open enrollment like a box to check—reactive, rushed, and largely delegated—that's a mistake.
If you want your benefits strategy to support long-term business growth and integrated planning, now's the time to take a fresh look with a fresh perspective. Here's how Ensign Partners evaluates our clients' group health insurance plans before the open enrollment period hits their inboxes.
Step 1: Review Your Employee Demographics and Needs
Start with your people. The best plan for a 12-person team of twenty-somethings isn't the same as what a 40-person team with families and dependents needs. And if you have employees who fall into both categories or have even more diverse needs, you need to take a serious look at how you can best serve them. Ask:
- What's your team's age breakdown?
- How many employees are using/needing family coverage?
- Are high-deductible health plans (HDHPs) and HSAs well understood and utilized?
- Have you received employee feedback about coverage gaps or frustrations?
In other words, your plan review isn't just about cost; it's about alignment. A plan that no one understands or uses correctly won't deliver value, no matter how well-priced it is. You want a plan that your employees will be happy to have. In other words, it is better to have your employees view their plan not as a necessary evil but as a positive good.
Step 2: Analyze Total Cost—Not Just Premiums
Most businesses focus on premiums alone. But the real cost of a group plan includes:
- Employer contributions
- Employee payroll deductions
- Deductibles and out-of-pocket maximums
- Health Savings Account (HSA) or FSA funding (if applicable)
- Administrative time and complexity in using the plan
Look at the total cost per employee, and weigh that against actual usage and satisfaction. A plan with lower premiums but poor network access may cost more in lost productivity, complaints, or attrition. In contrast, a higher cost plan that gives your employees true peace of mind and efficient service can convey to your employees a sense of how much you value them.
Tip: When evaluating costs, your perspective should encompass three tiers: employer, employee, and the business (including tax impact).
Step 3: Weigh Traditional vs. High-Deductible Plans with HSAs
High-deductible healthcare Plans (HDHPs) paired with HSAs can be a powerful tool for employees and business owners. HDHP plans have lower premiums, easing pressure on the company's healthcare budget line item. Although these plans have high deductibles for employees and their families, that burden can be offset by offering employees HSAs, which can be partially funded by the premium "savings" of the lower-cost plan. Employers can further contribute to employee HSAs, which may result in an overall lower cost for both employees and your business.
Benefits of HSA-eligible plans:
- Lower premiums (often significantly)
- Tax-deductible HSA contributions (for both employer and employee)
- Triple tax advantage for employees (pre-tax contributions, tax-free growth, tax-free withdrawals for medical expenses)
- Long-term savings potential for retirement healthcare
HSA contributions are not taxable when accessed to pay for qualified medical expenditures, which include over-the-counter medications, dental and orthodontic care, and meeting any plan deductibles. Contributions roll over indefinitely and belong to the employees, who may invest any unused HSA funds long-term, much as they would invest retirement funds. Accordingly, HSAs can be a valuable tax planning and retirement tool, particularly if an employee does not anticipate needing many medical services in the near term.
However, HSA plans only work well when:
- Employees understand how they work and use them strategically
- The deductible for the HDHP is manageable
- You're willing to fund or match HSA contributions to boost participation
Smart move: Many benefits companies can tailor benefit packages to offer both conventional plans and HDHP/HSA plans, giving employees maximum freedom to choose what works best for their situation.
Step 4: Evaluate Broker or Advisor Support
The quality of your benefits broker or consultant can make or break your open enrollment experience. Ask:
- Do they provide year-round service, or show up in Q4?
- Are they researching a broad selection of plans and providers that meet your employee demographic?
- Are they offering you strategic options rather than merely recycling last year's plan?
- Can they help educate employees and support onboarding?
- Are they coordinating with your tax and legal planning teams?
Your benefits strategy doesn't exist in a vacuum. It should be integrated into your broader compensation model, tax plan, and risk management structure. If your broker isn't thinking that way, you should consider a new insurance partner.
Step 5: Consider Long-Term Alignment with Your Business Goals
As your business grows, your group health plan needs to evolve. Before renewing, consider:
- Will this plan still work if we double in size in the coming year?
- Is the plan structure competitive in our hiring market?
- How does this benefit program support our retention strategy?
- Are we building a total rewards system, or just avoiding complaints?
The bottom line: Benefits are a business tool. Treat them that way.
Don't Leave Your Benefit Structure to HR Alone
Open enrollment shouldn't be a siloed Human Resources task. Your benefits package is a key touchpoint in your financial, legal, and operational plan. It has the potential to create a positive culture in your organization that impacts employee morale and retention. Your decisions this fall will ripple into your 2026 compensation strategy, tax exposure, and talent management.
Ensign Partners helps business owners integrate group healthcare plan decisions into a larger business planning framework so that your benefits strategy supports your whole business. Contact Ensign Partners to schedule a consultation when you're ready to align your group health plan with your overall business and wealth strategy. Don't let opportunities pass you by.