Open enrollment is one of the highest-value financial planning opportunities of the year, and most employees treat it as an afterthought. The decisions made during a typical enrollment window affect your tax bill, your healthcare costs, your disability and life insurance coverage, and your retirement savings for the entire following year. This guide covers what to actually review and the decisions most worth making carefully.

Health Insurance: Don’t Default to Last Year’s Plan

The most common enrollment mistake is re-enrolling in the same health plan from the previous year without reviewing whether it still makes sense. Your income, family size, anticipated healthcare utilization, and available plan options may all have changed.

For high-income earners in good health with low expected utilization, a high-deductible health plan (HDHP) paired with HSA contributions is frequently the most financially advantageous option; the premium savings plus the triple tax advantage of the HSA often outweigh the higher deductible for households who rarely meet it.

For households expecting significant healthcare utilization, a planned surgery, ongoing prescriptions, a pregnancy, a lower-deductible plan may make more financial sense despite higher premiums. Run the actual numbers on both scenarios using your anticipated healthcare spending.

The HSA: The Most Valuable Election Available to Most High Earners

If you enroll in an HSA-eligible HDHP, maximizing your HSA contribution is one of the most valuable elections available. The 2026 HSA limits are $4,400 for individual coverage and $8,750 for family coverage, with an additional $1,000 catch-up for those 55+.

The HSA provides a triple tax advantage: contributions are pre-tax (or tax-deductible), growth is tax-free, and withdrawals for qualified medical expenses are tax-free. For investors who can cover current healthcare expenses with other funds, the HSA functions as an additional tax-advantaged retirement account; invested HSA balances can be withdrawn penalty-free for any purpose after age 65.

FSA and Dependent Care FSA

A Flexible Spending Account (FSA) allows pre-tax contributions for qualified medical expenses, with the important caveat that most FSA balances must be used within the plan year (some plans allow a small rollover or grace period). The 2026 limit is $3,400.

The Dependent Care FSA covers childcare expenses for children under 13, with a 2026 limit of $7,500 per household. For households paying for full-time childcare, this is one of the most straightforward tax-saving elections available; $7,500 in childcare costs paid pre-tax rather than post-tax saves the full marginal rate on that amount.

Disability Insurance: The Gap Most Employees Miss

Employer-provided short-term and long-term disability insurance typically covers 60% of base salary. For high earners whose total compensation includes significant bonuses, RSUs, or other variable pay, this leaves a substantial coverage gap.

During enrollment, confirm what your employer’s disability coverage actually covers: base only, or total compensation? What’s the benefit period? Is there a cap on the monthly benefit? If coverage is insufficient, supplemental individual disability insurance may be worth purchasing. Premiums paid with after-tax dollars make the benefit tax-free if you ever need to claim it.

Life Insurance: Know What Group Coverage Is and Isn’t

Group life insurance provided through your employer is typically 1-2x salary, which is rarely sufficient for households with dependents and a mortgage. More importantly, it doesn’t travel with you when you change employers.

If your enrollment offers the option to purchase additional voluntary life coverage, compare the cost carefully against an individual term policy. Depending on your age and health, the group rate may or may not be favorable.

Deferred Compensation Plans (for Those Who Have Access)

Some employers offer non-qualified deferred compensation (NQDC) plans, which allow deferral of earned income into future years. These plans can be valuable for very high earners who want to defer income to lower-income years, but they carry meaningful risk: NQDC balances are unsecured obligations of the employer, meaning they could be lost in a bankruptcy.

If your company offers this and you’re considering participating, the analysis should include: the company’s financial stability, the distribution election options, and how the deferrals interact with your overall income and tax picture.

Millennial Wealth Tip: Most enrollment windows are 2–4 weeks, which may sound like plenty of time, but they go by quickly. The decisions worth the most attention are health plan selection (especially the HDHP vs. traditional plan analysis), HSA and FSA contribution amounts, and disability coverage adequacy. These three decisions alone can easily be worth thousands of dollars per year.