If you’re familiar with health and dental insurance, you’ve heard the term open enrollment period before. But do you know why it exists and what it means?

What is open enrollment?

An open enrollment period is a window of time where someone can change insurance benefits. They can buy insurance, make changes to their existing policy, or cancel coverage for the next calendar year.

Why does open enrollment exist?

Open enrollment serves two purposes. First, it helps to distribute the burden of risk for a benefits provider between the healthy and the sick.  Open enrollment provides a window of time where a person can add, change, or cancel coverage for the next 12-month period. 

Second, it establishes a set time for an individual to make additions or changes. This alleviates the burden on HR departments, as they would otherwise have to deal with this process daily.

It is important to note that additional opportunities to add or change your coverage become available through qualifying life-events. A few qualifying life events include marriage, births, deaths, or loss of previous coverage.

When is the open enrollment period?

Open enrollment typically occurs toward the end of the year, often from Nov. 1 through Dec. 15. This gives HR departments time to process any changes you choose before plans become effective on Jan. 1. This provides you with plenty of time to weigh your options. Research your plans and make decisions about what you want for the next year prior to open enrollment.