Open Enrollment Mistakes: The Five Things People Picked Wrong This Season

Plain English Benefits · Updated September 21, 2026 · Education, not tax advice

Short Answer

The most common open enrollment mistakes are over-electing to a healthcare FSA and losing money, choosing an FSA when you're HSA-eligible, ignoring the dependent care FSA entirely, failing to update elections after a life change, and missing the enrollment window. Most of these mistakes lock you in for a full year.

The Five Mistakes That Show Up Every Season

Open enrollment happens once a year for most people, and the choices you make stick for twelve months. That compressed timeline and the one-year commitment create predictable patterns. Here are the five things people consistently get wrong, and what each one costs you.

1. Over-Electing to a Healthcare FSA

This is the classic. You estimate high, life stays healthy, and you're scrambling in December to spend down $800 on eligible items you don't actually need.

Healthcare FSAs are use-it-or-lose-it accounts. Some plans allow a small carryover or a grace period, but most don't. If you elect $2,000 and only spend $1,200, you forfeit the rest. That's your own money, already deducted from your paycheck, gone.

The safer move is to elect conservatively. Cover your predictable recurring expenses—prescriptions, contact lenses, known copays—and stop there. Don't pad the election with hypotheticals. Our breakdown in Is an FSA Worth It? walks through the math for three real scenarios, including what happens when you over-elect.

2. Choosing an FSA When You're HSA-Eligible

If you're enrolled in a high-deductible health plan that qualifies you for a Health Savings Account, you generally cannot also contribute to a standard healthcare FSA. The two don't stack.

People miss this because the open enrollment portal often lists both options, and nothing stops you from clicking both boxes. The conflict doesn't appear until tax time, or when your HSA contributions get rejected.

The exception is a limited-purpose FSA, which only covers dental and vision expenses. That one pairs with an HSA. But a general healthcare FSA disqualifies you from HSA contributions entirely for that year.

We explain the compatibility rules in Can You Have an HSA and FSA?. If your health plan is HSA-qualified, confirm what type of FSA your employer offers before you elect anything.

3. Ignoring the Dependent Care FSA

Dependent care FSAs let you set aside pre-tax dollars for childcare or adult dependent care expenses. The annual limit is $5,000 per household, and the tax advantage can be significant for families paying for daycare or after-school care.

The mistake is not electing at all, or electing too little. If you're paying $1,200 a month for daycare, you're leaving money on the table by not using the full $5,000 limit. The pre-tax treatment lowers your taxable income, which means you're effectively paying for care with discounted dollars.

This one requires proof of expenses, so you'll need receipts and a provider tax ID. But the setup is straightforward, and it works for a wide range of care situations. Our Dependent Care FSA guide covers eligibility and the mechanics.

4. Not Updating Elections After a Life Change

Open enrollment is your annual chance to adjust benefits, but certain life events let you make changes mid-year. Marriage, divorce, birth, adoption, loss of other coverage—these are qualifying events that open a special enrollment window.

The mistake is assuming you're stuck with your January elections no matter what happens. If you get married in March and your spouse has better coverage, you can drop yours. If you have a baby in June, you can add dependent care FSA dollars mid-year for the remainder of the plan year.

You typically have 30 days from the qualifying event to request the change. Miss that window and you're locked in until the next open enrollment. Your HR department or benefits administrator can confirm what qualifies and how to submit the change.

5. Missing the Enrollment Window Entirely

Open enrollment runs for a limited period, often just two to three weeks. If you don't make elections during that window, you default to whatever the plan's passive enrollment rule is—usually no coverage, or a continuation of last year's elections if you were already enrolled.

For new hires, missing the window means waiting until the next annual enrollment period to make changes. That can be eleven months of no FSA, no voluntary benefits, and potentially no health coverage depending on your employer's default rules.

Set a calendar reminder the day enrollment opens. Don't wait for the deadline. Our open enrollment checklist gives you the 20-minute version of what to review and decide.

What These Mistakes Have in Common

They're all timing and information problems. Open enrollment compresses a year's worth of healthcare and financial decisions into a short window, and most people are making the call with incomplete information about what the next twelve months will bring.

You can't predict everything, but you can avoid the predictable mistakes. Elect conservatively on healthcare FSAs. Check HSA compatibility before electing any FSA. Use the dependent care FSA if you're paying for care. Know your qualifying events. Don't miss the window.

The goal is not to optimize every dollar. The goal is to avoid losing money on a preventable mistake.

FAQ

What happens if I over-elect to my FSA?

You lose the unused balance at the end of the plan year, unless your plan allows a small carryover or grace period. Most plans don't. The money is forfeited, and there's no way to withdraw it or roll it into the next year. Elect conservatively to avoid this.

Can I change my FSA election mid-year?

Generally no, unless you experience a qualifying life event like marriage, divorce, birth, adoption, or a change in employment status. Those events open a special enrollment window, typically 30 days from the event. Outside of that, your election is locked in for the full plan year.

How do I know if I'm HSA-eligible?

You're eligible if you're enrolled in a high-deductible health plan that meets IRS requirements and you're not covered by other disqualifying coverage, including a general healthcare FSA. Your health plan documents will state whether the plan is HSA-qualified. If you're not sure, ask your HR department before electing an FSA.

What counts as a dependent care expense for the FSA?

Daycare, preschool, before and after-school programs, summer day camps, and adult dependent care that allows you or your spouse to work all qualify. The care provider must give you their tax ID. Overnight camps, kindergarten tuition, and late fees generally don't qualify. The IRS has a full list in Publication 503.

Make Better Choices Next Time

Open enrollment mistakes are frustrating because you're locked in for a year. You can't undo an over-election, you can't add an FSA mid-year without a qualifying event, and you can't recover a missed deadline.

The good news is that most of these mistakes are avoidable with a checklist and 20 minutes of focused attention. Review your recurring healthcare expenses, confirm your HSA eligibility, calculate your dependent care costs, and submit your elections before the deadline.

Running the plan, not just using it? The setup guide at /services/section-125-setup walks through the plan document, payroll setup, and the two traps that catch almost everyone—in plain English.