2025 Open Enrollment Compliance Checklist for California Employers

The Importance of Compliance During Open Enrollment

Open enrollment isn’t just about offering benefits—it’s about doing so legally and ethically. For employees, open enrollment is a great chance to make any changes to their benefits to better serve the needs of themselves and their family. Employers during this time, get the chance to support their staff, while keeping their business compliant and positioned for success. 

By maintaining compliance:



• You mitigate the risk of legal penalties.
• You avoid administrative issues such as incorrect billing or misclassification of employees.
• You reinforce a positive company culture by ensuring fairness and clarity.

2025 Open Enrollment Requirements

For 2025, employers that have more than 50 full-time employees (or full-time equivalents) are required to offer affordable, minimum-value health coverage under the ACA to avoid penalties. Additionally, employers of all sizes must issue notices informing eligible employees about available health insurance coverage.

Timeline Guidelines for 2025 Open Enrollment in Group Benefits

For group benefits, it’s essential to plan for key dates well in advance, though specific timelines can vary. If your small group has a 1/1/2025 renewal, expect to receive a pre-renewal survey from your broker roughly 90 days before the renewal date. Around 60 days prior, your broker will provide the renewal details and alternative options for review. Make sure to coordinate with your broker to discuss any changes or to schedule an open enrollment meeting, allowing employees sufficient time to understand their choices.



Typically, employees are given a 1-2 week period to make decisions on benefits selections just ahead of the effective date. For larger groups or organizations using alternate funding arrangements, the timeline may differ, so consult with your broker to establish a schedule that aligns with your unique needs.

Open Enrollment Checklist for California Employers

During the open enrollment period, one of the most important things for California employers to do involves reviewing and updating their benefits plan. Use this as a yearly opportunity to verify that all health plans and other benefits comply with both state and federal laws.

Based on any changes that you make, you'll also want to update your employee benefits portal to keep everyone on the same page at all times. Then, distribute all the required notices (including the California Healthy Workplaces notice, the sick leave notice, etc.) and make sure that you comply with all Affordable Care Act and California-specific health coverage mandates.

While it's true that this can all take a great deal of time and effort to get right, it's easy if you enlist the help of a team of professionals like those at AEIS. We can take care of these things on your behalf so that you can focus less on mitigating risk during open enrollment and more on running the most successful business that you can.

California-Specific Laws to Know

A few of the California-specific laws that you'll definitely want to be aware of include but are not limited to those like:

San Francisco HCSO

Also called the Health Care Security Ordinance, this requires employers with 20 employees company-wide (50+ for nonprofits) to make healthcare contributions on behalf of their employees who work in the city of San Francisco for a certain number of hours per week, with a higher contribution required for businesses with more than  100 employees.

California Paid Family Leave

This is a law in the state of California that mandates paid family leave for a wide range of different caregiving-related circumstances.

SDI

This is a requirement that all employers need to make certain that eligible employees are enrolled in California's State Disability Insurance program.

Required Notices for Employers

Some of the notices that you'll need to distribute during the open enrollment period include ones like the HIPAA Notice of Privacy Practices, COBRA-related Notices, Patient Protection Disclosure, Medicare Part D Notice of Creditable Coverage,  the Your Rights and Protections Against Surprise Medical Bills, and more. You'll want to guarantee that all these notices have been distributed to the appropriate parties as quickly as possible so that they can make the most informed decisions possible when it comes to open enrollment. If you have an online benefits enrollment system you may be able to post the required notices on the system as required reading in the enrollment process in lieu of physically handing out copies to employees.

Ensure Non-Discrimination Testing is Conducted

During this time, you'll also want to confirm that how you offer  benefits plans  does not discriminate against any employees. Employees who make more money can't be treated more favorably , for example.

Proper Classification of Employees

Take great care to ensure that you are properly categorizing full-time, part-time, and 1099 workers during the open enrollment period or you could face hefty fines and other violations as a result.

Document and Audit Everything

At a bare minimum, you need to keep a record of all communications with employees pertaining to open enrollment. You'll also want to document and track all employee contributions and periodically audit this all throughout the year to make sure that everything is as it should be. This includes collecting signed waivers for any employees who choose not to participate in any of the plans you offer.

HIPAA Compliance and Protecting Employee Information

When it comes to HIPAA, you'll need to make sure that certain types of employee information are fully protected during open enrollment. All employee data, including the type of health insurance they have and date of births and more, should be kept confidential. If yours is a business with a human resources department, they need to be fully trained and up-to-date on the proper handling of Personal Health Information (PHI). You'll also need to take great care to make sure that any information stored electronically is safeguarded as well.

Common Mistakes During Open Enrollment

There are a wide range of different mistakes that businesses often fall into during open enrollment, especially when they try to do things themselves without the guidance of an experienced broker.

Verifying Invoices Post-Enrollment

After enrollment changes have been fully processed, confirm that all billing is accurate, that proper contributions have been made, and that employees who opted out of coverage are not charged.

Coordinating with Brokers and COBRA Administrators

Always work with brokers to ensure that plan information is accurate. Do what you can to make the transition for employees who may qualify for COBRA as seamless as possible.

Communicating Benefit Changes and Enrollment Dates Clearly

Whenever benefits or open enrollment dates change, you need to provide clear instructions to employees and let them know what they can expect. Set your expectations ahead of time and offer assistance whenever necessary. Doing so will go a long way towards preserving your relationship with your employees.

Ensuring Compliance with California & Federal Laws for 2025

It’s important to remember that open enrollment compliance goes beyond California-specific regulations. Federal laws, including the Affordable Care Act (ACA) requirements, play a key role in maintaining a compliant benefits offering.

ACA Reporting Requirements for 2025

For ACA reporting requirements for 2025, Applicable Large Employers (ALE’s) need to provide form 1095-C to employees so that they can then file with the IRS to prove that they have offered the required coverage. Confirm that all information on that form is accurate to avoid confusion moving forward.

How AEIS Can Help

Navigating compliance for 2025 open enrollment doesn’t have to be overwhelming. At AEIS, our team of experts offers tailored solutions to help California employers meet all federal and state requirements. Whether you need assistance with benefits planning, ACA reporting, or employee communication, we’re here to streamline the process and ensure compliance.

Contact us today to learn how we can help your organization navigate the complexities of open enrollment with confidence.

Disclaimer

Any information related to compliance, laws, and regulations in this blog is intended to be informational and does not constitute legal advice regarding any specific situation. The content is based on the most up-to-date information available on the date it was published and is subject to change. Should you require further assistance or legal advice, please consult a licensed attorney.