The Q4 2025 Survival Guide
“We’ll just send an email a few days before it starts.”
That’s what HR managers say before open enrollment. By week two, they’re fielding angry employee calls, chasing down missing enrollments, and realizing their Section 125 documents haven’t been updated since 2019. By the end of Q4, a DOL audit notice arrives in the mail.
Sound familiar?
Whether your open enrollment is next week or next month, here’s what you need to know about the Q4 2025 landscape.
Why 2025 Is Different—And Worse
The Premium Explosion
2026 premiums are up 18%—the highest increase since 2018. For small businesses specifically, increases range from 5-15%, with 68% of insurers requesting increases in that range.
What this means for you: Your employees will face sticker shock. A single email announcement won’t cut it. You need education, comparison tools, and real support.
The Compliance Changes
The ACA affordability threshold jumped from 9.02% in 2025 to 9.96% in 2026. IRS penalties for applicable large employers who fail to offer qualifying coverage are also increasing in 2026.
What you need to do: Recalculate what you’re charging employees for the lowest-cost plan. If an employee’s required contribution exceeds 9.96% of their household income, you’re at risk for penalties. This isn’t optional.
The Tax Credit Cliff
Enhanced ACA subsidies are set to expire at the end of 2025. If they expire, net premiums for subsidized individuals could jump by over 75%.
Who this impacts: Small business owners, self-employed individuals, and any employees who get coverage through the marketplace instead of—or in addition to—your group plan.
The Deadline Crunch
The federal marketplace open enrollment runs from November 1, 2025, through January 15, 2026. However, the typical extension may not happen this year—meaning December 15, 2025 could be the hard deadline.
What this means: Less time to fix mistakes. Less flexibility for late enrollers. Higher stakes for getting it right the first time.
The Stats That Should Wake You Up
In a recent study, finding benefits cost savings was ranked as the number one challenge by 51% of HR leaders.
Only 3 out of 10 benefits leaders report that their company does a good job of communicating employee benefits, and fewer than half of benefits leaders say their team members understand what benefits are available and how to use them.
Let’s be frank: Half of your employees don’t understand their current benefits. Now you’re adding 10-18% premium increases and new compliance thresholds. Without a solid communication strategy, this is a recipe for disaster.
The Compliance Trap Nobody Sees Coming
The Department of Labor continues to scrutinize plan documents and summary plan descriptions during audits. Without proper Section 125 plan documentation, employers risk losing the tax-advantaged status of their entire benefits program—potentially resulting in significant tax liabilities for both the company and employees.
What Actually Happens:
We’ve seen companies hit with six-figure retroactive tax bills because their “cafeteria plan” wasn’t properly documented. Here’s how it unfolds:
- DOL audit reveals missing or outdated Section 125 documents.
- Pre-tax benefit deductions are suddenly not compliant.
- Company owes back payroll taxes (sometimes for multiple years).
- Employees have to amend multiple years of tax returns.
- Trust is shattered, legal fees pile up.
The worst part? The company thought everything was fine because “we’ve always done it this way.”
Many employers operate their benefits programs without proper Section 125 plan documents or with outdated documentation that doesn’t reflect current benefit offerings
The Two Mistakes That Kill Open Enrollment
Two pitfalls consistently undermine open enrollment: overwhelming employees with jargon-heavy communications and failing to provide decision-making support.
Mistake #1: The Information Overload
You send a 47-page benefits guide PDF packed with terms like “deductible,” “coinsurance,” “out-of-pocket maximum,” and “HSA contribution limits.” Employees’ eyes glaze over. They pick the cheapest plan without understanding the trade-offs.
Then March arrives. An employee needs healthcare and discovers their “savings” plan has a $6,000 deductible. Cue the angry calls to HR.
Better approach: Create visual comparison charts showing:
- Monthly cost
- What you pay before insurance kicks in
- Common scenarios (doctor visit, ER, prescription)
- Real dollar amounts instead of percentages
Mistake #2: The “Good Luck” Strategy
One of the biggest pain points during open enrollment is chasing down employees to enroll and manually syncing elections with payroll.
You send one email. Half the employees don’t open it. A quarter of them start the enrollment but don’t finish. You’re manually tracking who’s done, who hasn’t, and trying to sync everything with payroll while also answering the same questions 47 times.
Better approach:
- Automated tracking dashboard
- Multiple communication channels (email, text, in-person sessions, recorded videos)
- Proactive outreach to stragglers
- Clear escalation path for questions
Your Q4 Compliance Checklist
Use this to assess where you stand RIGHT NOW:
COMPLIANCE FOUNDATION:
- Section 125 Plan Document – Current and signed; matches your actual benefits
- Summary Plan Description (SPD) – Ready to distribute within 90 days of enrollment
- COBRA Procedures – Documented and compliant with recent regulatory changes
- ACA Affordability – Recalculated using 9.96% threshold for 2026
- ERISA Disclosures – All required notices prepared and scheduled
Red flag: If you answered “not sure” to any of these, you need legal review NOW.
COMMUNICATION STRATEGY:
- Multi-channel plan – Email + meetings + one-on-one + recorded content
- Plain-language materials – Tested with actual employees, not just HR
- Education sessions – Scheduled with multiple time options
- Multiple touchpoints – At least 5 communications planned
- Premium increase messaging – Prepared to explain WHY costs are up
Reality check: Only 30% of companies communicate benefits well. Don’t be part of the 70% that fails at this.
TECHNOLOGY & TRACKING:
- Enrollment platform – Tested with real user scenarios
- Completion tracking – Dashboard showing who’s enrolled in real-time
- Payroll integration – Verified and tested before go-live
- Mobile accessibility – Works on phones, not just desktop
- Data security – HIPAA compliant and documented
EMPLOYEE SUPPORT:
- Decision-support tools – Calculators, comparison charts, real scenarios
- One-on-one availability – Clear process for scheduling help
- FAQ document – Addresses premium increases and plan changes
- Marketplace comparison – Info for employees considering off-exchange plans
The "We've Always Done It This Way" Trap
The most dangerous phrase in open enrollment? “We’ve always done it this way and been fine.”
Here’s the reality: Many employers run benefits programs for years with outdated documentation—until something triggers scrutiny.
Common triggers:
- Employee complaint to DOL
- Routine DOL audit
- Benefits-related lawsuit
- Acquisition or merger due diligence
- IRS examination
By the time you discover the problem, you’re already in a compliance hole that’s expensive and time-consuming to fix.
When to Get Help
You probably need professional help if:
- Your Section 125 documents are older than two years
- You have 50+ employees (ACA large employer rules apply)
- Your premiums are increasing 10%+ and you’re dreading employee reactions
- You’ve never had your benefits documentation professionally reviewed
- Last year’s open enrollment was chaotic and you swore you’d do better “next time”
- You operate in multiple states with different compliance requirements
- You’re not confident about your ACA affordability calculations
You definitely need help immediately if:
- You can’t locate your Section 125 plan documents
- Open enrollment starts in less than two weeks and you haven’t started planning
- You received a DOL audit notice
- Employees are threatening legal action over benefits issues
- You’re not sure if you’re an ACA applicable large employer
Don’t Wing Q4 Open Enrollment
Whether your enrollment starts next week or six weeks from now, the time for planning is RIGHT NOW.
At Merritt Business Solutions, we help businesses navigate open enrollment with:
✅ Compliance documentation review and updates
✅ Plain-language employee communication materials
✅ Benefits education session facilitation
✅ One-on-one employee consultations
✅ ACA affordability calculations and monitoring
✅ Technology platform support
✅ Ongoing compliance support
Meet with a MBS representative to get your Q4 open enrollment compliant, efficient, and employee-friendly.
