Health insurance open enrollment mistakes to avoid in 2026

Quick answer: The three most expensive open enrollment mistakes are: (1) keeping your current plan without reviewing alternatives, (2) choosing the lowest premium without calculating total out-of-pocket costs, and (3) missing the HSA opportunity by enrolling in a non-HDHP plan. Employer open enrollment windows are typically 2-4 weeks in October-November. Missing the deadline locks you in until the next year (or a qualifying life event).

Open enrollment is the one annual window to change your health coverage. Most employees spend less than 30 minutes on the decision -- and that rushed choice affects $5,000-$15,000+ of annual health spending.

Mistake 1: Defaulting to last year's plan without reviewing

Auto-enrollment keeps you in your current plan if you do nothing during open enrollment. The problem: plan networks, formularies, and costs change every year.

What changes between enrollment years:

• Your premium contribution (employer share can change)
• The deductible and out-of-pocket maximum
• Which drugs are covered (formulary changes)
• Which doctors and hospitals are in-network
• Whether your current doctors are still in-network

Even if the plan name is the same, the terms may not be. Pull up both years' Summary of Benefits and Coverage (SBC) documents and compare them side by side.

Mistake 2: Choosing the plan with the lowest premium

Monthly premium is the visible cost; total out-of-pocket is what you actually spend. A $150/month premium vs. $250/month premium looks like a $1,200/year difference. But if the cheaper plan has a $3,000 higher deductible, one hospitalization eliminates the premium savings.

The right comparison:

Calculate your total annual cost under each plan:

1. Annual premium (your share, after employer contribution): 12 × monthly premium
2. Estimate your expected medical expenses for the year (use prior year as a baseline)
3. Apply the plan's cost-sharing (deductible, copays, coinsurance) to your estimated expenses
4. Compare total annual cost (premium + estimated out-of-pocket) across plans

If you're generally healthy and rarely use healthcare: a high-deductible plan with lower premiums may cost less overall. If you have ongoing care needs, prescriptions, or expect a procedure: a lower-deductible plan may cost less despite higher premiums.

Mistake 3: Missing the HSA opportunity

High-Deductible Health Plans (HDHPs) that meet IRS thresholds allow you to contribute to a Health Savings Account (HSA). For 2026:

• Individual HDHP minimum deductible: $1,650
• Family HDHP minimum deductible: $3,300
• HSA contribution limit (individual): $4,300
• HSA contribution limit (family): $8,550
• Catch-up contribution (age 55+): additional $1,000

Why HSAs are valuable:

• Contributions are pre-tax (reduce your taxable income)
• Growth is tax-free
• Withdrawals for medical expenses are tax-free
• After age 65, withdrawals for any purpose are taxed as ordinary income (like a traditional IRA)
• No "use it or lose it" -- the balance rolls over indefinitely

For someone in the 22% tax bracket contributing $4,300 to an HSA, the tax savings alone is $946 per year. Combined with the employer HSA contribution many companies offer with HDHPs, the HSA can offset the higher deductible.

Not everyone benefits from an HDHP + HSA. If you expect to hit your deductible early in the year (due to ongoing care), the upfront costs may outweigh the tax benefit.

Mistake 4: Not checking whether your doctors are in-network

Network status changes every year. A doctor who was in-network last year may have dropped out. Before finalizing your plan selection, verify:

1. Go to the plan's provider directory (use the plan-year-specific directory, not a general page)
2. Search for each of your regular doctors by name and NPI number
3. Confirm the specific office location is in-network (a doctor can be in-network at some locations but not others)

If a key provider is out-of-network on one plan but in-network on another, that may be the deciding factor regardless of premium or deductible differences.

Mistake 5: Forgetting about prescription drugs

Each health plan has a formulary -- a list of covered drugs organized by tiers that determine your cost. The same medication can be a $10 copay under one plan and $200+ under another.

Before open enrollment:

1. List all medications you take regularly
2. Check each medication's tier under each plan's formulary (available on the insurer's website)
3. Calculate your annual drug costs under each plan

Generic drugs are usually Tier 1 (lowest cost) on all plans. Brand-name and specialty drugs vary significantly. If you take a high-cost specialty medication, the formulary difference can dwarf any premium difference.

Mistake 6: Skipping voluntary benefits without understanding what you're declining

Dental, vision, life, disability, FSA, and dependent care FSA elections are typically separate from medical. Common mistakes:

• Skipping dental: If you have upcoming dental work, dental insurance has annual benefit maximums -- enroll early enough to count your coverage year strategically.
• Missing FSA deadlines: Flexible Spending Accounts have "use it or lose it" rules. Don't over-contribute; estimate carefully.
• Underinsuring life and disability: Group life is cheap through employers. Short-term and long-term disability protect your income if you can't work.

For understanding what your health policy covers and doesn't, see what does my insurance cover and health insurance deductible vs out of pocket.

Frequently asked questions

What if I miss my employer's open enrollment deadline?

If you miss the employer open enrollment window, you generally cannot change your coverage until the next open enrollment period or a qualifying life event (marriage, birth, job change, loss of other coverage). Qualifying life events typically trigger a 30-60 day special enrollment period.

Can I enroll in COBRA during open enrollment?

COBRA is a continuation of your former employer's coverage, not an enrollment choice during your new employer's open enrollment. If you're currently on COBRA, check whether your employer open enrollment deadline triggers a required decision about COBRA vs. employer coverage.

What is a qualifying life event?

Events that allow mid-year enrollment changes: marriage or domestic partnership, birth or adoption, divorce or legal separation, loss of other coverage (e.g., spouse loses their job), moving out of the plan's service area, or significant change in family or employment status. The window to elect coverage after a qualifying event is typically 30-60 days.

How do I compare plans if I can't estimate my health spending?

Use your prior year's Explanation of Benefits (EOB) from your insurer as a baseline. Total your out-of-pocket costs for the year. Apply that same spending level to each plan's cost-sharing structure. If you have no prior year data, use the national average of ~$1,500-$2,000 in annual out-of-pocket costs for a relatively healthy adult.

Is a PPO always better than an HMO?

PPOs give you more flexibility to see out-of-network providers at higher cost. HMOs require referrals from a primary care physician but typically have lower premiums and out-of-pocket maximums. If you have a narrow set of preferred providers who are all in-network under an HMO, the HMO may cost less with no meaningful downside for your situation.

Use ReadMyPolicy to compare the Summary of Benefits and Coverage documents for plans you're considering to identify the key differences before you choose.