American Insurance · PUBLISHED 15 JUL 2026 · VERIFIED 15 JUL 2026 · US EDITION

The $750 Open Enrollment Mistake 42% of Americans Make Every Year

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In one insurer survey, 42% of Americans leave up to <mark class=“fig”>$750 of potential savings on the table every year by making open enrollment choices that don’t fit their needs, simply because they default to the same benefits year after year.

The number that matters

90% — share of workers who pick the same benefits year after year, potentially wasting hundreds of dollars annually according to Aflac’s survey on open enrollment behavior (National Foundation for Credit Counseling summary, 2019).

How it quietly costs you

Problem: Sticking with last year’s health plan (and other benefits) without comparing options.

Mechanism

• Aflac’s survey data (reported by NFCC) shows 90% of Americans choose the same benefits year after year.
• Because health plans change premiums, deductibles and networks annually, “choosing the same coverage mindlessly” is singled out as the first major blunder in open enrollment guidance.
• U.S. coverage guides highlight that both employers and insurers routinely change coverage levels, premiums, in‑network providers and out‑of‑pocket costs year to year, making assumptions about “same as last year” risky.
• For ACA marketplace plans, experts warn that “sticking with your current health insurance plan – without exploring your options – can be a huge enrollment blunder”, as new plans may offer similar coverage at lower total cost or better provider networks.

Quantified impact

• NFCC reports that 42% of workers miss out on up to <mark class=“fig”>$750 a year because their default elections don’t match their actual needs.
• CNBC’s coverage of open enrollment notes that failing to reassess benefits can cost workers “hundreds, if not thousands” of dollars per year in avoidable premiums and missed tax‑advantaged savings, based on interviews with benefits experts.
• USA Today identifies “choosing the same coverage mindlessly” as a top blunder and notes that it can leave employees overpaying for premiums or facing higher out‑of‑pocket costs than necessary.

Old vs better comparison

• Old behavior: Auto‑re‑enroll in last year’s plan and ignore plan changes.
• Better behavior: Dedicate at least 30 minutes to review all available health, dental, vision, life and disability options every open enrollment, as recommended by benefits experts interviewed by CNBC. Creative Planning similarly stresses reviewing all options and not assuming details are unchanged.

The second, compounding trap

Problem: Misusing or ignoring tax‑advantaged accounts like FSAs and HSAs, leading to either wasted contributions or missed tax savings.

Mechanism

• USA Today flags “misunderstanding tax-advantaged accounts for out-of-pocket expenses” as one of the five major open enrollment blunders.
• Forbes notes that many employees don’t appreciate the advantages of HSA‑eligible plans, even though they typically have lower monthly premiums but higher deductibles, and HSAs offer triple tax benefits (pre‑tax contributions, tax‑free growth, tax‑free withdrawals for qualified medical expenses).
• Creative Planning lists “overlooking the benefits of flexible spending accounts (FSAs) and health savings accounts (HSAs)” as a key open enrollment mistake, meaning workers either skip these accounts or choose inappropriate contribution levels.
• NFCC highlights that many people think open enrollment is the only financial planning they need, leading them to neglect independent tax and savings strategies that could leverage FSAs/HSAs more effectively.

Quantified cost of inaction

Because specific FSA/HSA tax savings vary by income and contributions, the impact is best illustrated through typical ranges:

• A worker contributing <mark class=“fig”>$2,000 to a healthcare FSA on a 25% marginal tax rate (federal + payroll) saves roughly <mark class=“fig”>$500 in taxes for the year (inferred using IRS rules that FSA contributions are pre‑tax).
• If that same worker doesn’t enroll in the FSA despite predictable medical expenses, they effectively pay <mark class=“fig”>$500 more after tax for the same <mark class=“fig”>$2,000 of care.
• On the flip side, USA Today warns that misunderstanding these accounts—such as over‑contributing without a spending plan—can mean forfeiting unused FSA funds at year‑end, a direct loss of however many pre‑tax dollars were not used.
• Over a decade, consistently missing a <mark class=“fig”>$500 per year tax saving from FSA/HSA contributions amounts to <mark class=“fig”>$5,000 in lost after‑tax money, ignoring investment growth. If those savings were invested at a modest 5% annual return, the opportunity cost rises to roughly <mark class=“fig”>$6,300 (this is a modelled projection, not from a specific source).

Old vs better comparison

• Old behavior: Skip FSA/HSA enrollment or pick random contribution amounts without reviewing last year’s expenses.
• Better behavior: Use past 12‑month medical, dental and vision expenditures to set intentional FSA/HSA contributions during open enrollment, as suggested by benefits experts and financial planners who recommend looking at “what health-related costs did you pay for in the past year” before making elections.

What this looks like in practice

Persona

• Name: Maria
• Age: 38
• Job: Marketing manager at a mid‑size company
• Income: <mark class=“fig”>$80,000 per year (pre‑tax)
• Current benefits: PPO health plan, no FSA/HSA use, 401(k) contributions below full employer match
• Years to retirement: 27 (assuming retirement at age 65)

Discovery 1 — Wrong health plan, wrong total cost

• Maria has stayed in the same traditional PPO plan for 5 consecutive years without comparison, mirroring the 90% of workers who keep the same benefits annually.
• Her PPO premium is <mark class=“fig”>$75 more per month than a comparable HSA‑eligible high‑deductible health plan (HDHP) offered by her employer (illustrative but consistent with Forbes’ description that HSA‑eligible plans “generally feature lower monthly premiums” than traditional health insurance).
• That extra <mark class=“fig”>$75/month equals <mark class=“fig”>$900 per year in higher premiums.
• If she also has predictable annual out‑of‑pocket medical spending of <mark class=“fig”>$1,500, an HSA contribution of <mark class=“fig”>$1,500 at a 22–25% marginal rate would save roughly <mark class=“fig”>$330–<mark class=“fig”>$375 in taxes—which she currently misses by not using the HSA (calculated using IRS rules on HSA tax treatment).
• Combined, Maria is overpaying roughly <mark class=“fig”>$1,230 per year (higher premiums plus missed tax savings) by sticking with the old PPO instead of switching to the HDHP + HSA structure described by Forbes and planners.

Discovery 2 — Missed employer 401(k) match via open enrollment inertia

• Creative Planning specifically identifies “missing out on employer matching contributions” as a common open enrollment mistake.
• Suppose Maria’s employer offers a 3% dollar‑for‑dollar 401(k) match, but she has only been contributing 2% of her <mark class=“fig”>$80,000 salary.
• That 1‑percentage‑point gap means she is missing <mark class=“fig”>$800 of employer match every year (1% of <mark class=“fig”>$80,000).
• Over 27 years, if left unchanged, that’s <mark class=“fig”>$21,600 in free employer contributions not captured.
• If employer match contributions would have earned a 5% annual return in her 401(k), the opportunity cost of missing <mark class=“fig”>$800/year over 27 years is approximately <mark class=“fig”>$45,000 in retirement money (this is a modelled projection using standard compound interest assumptions, not a regulator figure). This aligns with planners’ warnings that failing to maximize employer match can significantly reduce long‑run retirement savings.

Discovery 3 — Mismanaged FSA leads to direct annual losses

• USA Today warns that misunderstanding FSAs can lead to over‑contributing and losing unused funds.
• Assume Maria finally enrolls in her employer’s healthcare FSA at <mark class=“fig”>$2,500 per year but, without planning, uses only <mark class=“fig”>$1,500 of it.
• Her <mark class=“fig”>$1,000 of unused FSA contributions are forfeited at year‑end under typical “use-it-or-lose-it” rules, representing a direct <mark class=“fig”>$1,000 loss that year (inferred from IRS FSA rules summarized by USA Today, which note forfeiture of unused funds).
• Over 5 years of repeated over‑contribution, this mistake would cost her <mark class=“fig”>$5,000 in forfeited pre‑tax money, despite USA Today’s warning to align contributions with expected expenses.

The full cost of doing nothing

For Maria, combining the two main problems—defaulting to the wrong health plan and misusing tax‑advantaged/savings accounts—creates a long‑run cost on two fronts: annual cash flow and retirement savings.

Health plan + tax accounts impact (annual)

• Extra PPO premiums vs HDHP: <mark class=“fig”>$900 per year.
• Missed HSA tax savings: roughly <mark class=“fig”>$350 per year (midpoint of <mark class=“fig”>$330–<mark class=“fig”>$375 range).
• Mismanaged FSA forfeitures (from Discovery 3): <mark class=“fig”>$1,000 per year when she over‑contributes.

Total annual hit: about <mark class=“fig”>$2,250 per year in avoidable health‑related costs and wasted tax‑advantaged contributions.

If Maria repeats these choices for 10 years, the combined cash cost is roughly <mark class=“fig”>$22,500, ignoring investment growth.

Retirement impact

• Missed employer match: <mark class=“fig”>$800 per year, as described above.
• Over 27 years, the direct forgone contributions are <mark class=“fig”>$21,600.
• With a moderate 5% annual investment return, those missed match dollars could compound to roughly <mark class=“fig”>$45,000 (modelled projection).

Headline combined number (cash + retirement)

• Over Maria’s remaining career, the combination of:
• wrong health plan,
• misused FSA/HSA, and
• underutilized 401(k) match

can reasonably model to <mark class=“fig”>$60,000+ in lifetime cost (about <mark class=“fig”>$22,500 in 10‑year cash impacts plus ~<mark class=“fig”>$45,000 in missed retirement growth, noting this is an illustrative projection built from the specific annual figures above).

What to do about it

Move 1 — Audit your health plan choice using employer materials

1. Action: Review and compare all health plan options offered during open enrollment.
2. Tool/portal: Your employer’s benefits enrollment portal and plan comparison materials, which typically show premiums, deductibles, copays and out‑of‑pocket maximums—elements many employees ignore when they focus solely on monthly premiums.
3. Steps:

• Log into your employer’s benefits portal and download the plan comparison sheet for all available medical options.
• List: monthly premium, annual deductible, out‑of‑pocket maximum and whether your current doctors are in‑network for each plan, as recommended by benefits guidance that urges reviewing in‑network providers and total costs, not just premiums.
• Choose the plan that minimizes your expected total annual cost (premiums + likely out‑of‑pocket expenses) given last year’s usage, mirroring expert advice to look at “what health-related costs did you pay for in the past year” and anticipated procedures.

4. What “good” looks like: Your chosen plan has:

• In‑network access to your key providers, and
• A lower projected total annual cost than your current plan for your usage pattern, rather than just a lower or higher premium.

Move 2 — Right‑size FSA/HSA contributions based on your last 12 months

1. Action: Set intentional FSA/HSA contribution levels that match predictable expenses.
2. Tool/portal: Employer FSA/HSA enrollment pages in your benefits portal, often accessed during open enrollment when you elect contribution amounts.
3. Steps:

• Pull bank and card statements for the last 12 months and total your out‑of‑pocket spending on medical, dental, vision and prescriptions, as recommended by planners who advise reviewing past costs before enrollment.
• Use that total (adjusted for any known upcoming procedures or changes) as your baseline contribution for your healthcare FSA or HSA.
• Enter that amount in your FSA/HSA election screens and note the tax savings: multiply your contribution by your marginal tax rate to see how much you’re likely saving in taxes (FSAs and HSAs are explicitly identified as valuable tax‑advantaged accounts by multiple financial planning sources).

4. What “good” looks like:

• FSA: You use nearly 100% of your annual contribution, minimizing forfeited funds.
• HSA: You contribute enough to cover predictable expenses and, if possible, some additional funds that can grow tax‑free for future medical costs, leveraging the triple tax benefit described by financial planners.

Move 3 — Check and fix your 401(k) match and beneficiaries during enrollment

1. Action: Increase your 401(k) contribution to capture full employer match and ensure beneficiaries are accurate.
2. Tool/portal: Employer retirement plan portal (often linked through the same benefits site) plus the beneficiary designation section highlighted in open enrollment guidance.
3. Steps:

• Log into your 401(k) portal and find the summary plan description or contribution page showing the employer matching formula (e.g., “100% match on the first 3% of pay”). Open enrollment guidance calls missing employer matching contributions a core mistake.
• Compare your current contribution rate to the match threshold and increase it at least to the level that earns the full match (e.g., from 2% to 3% of pay if that’s the employer match level), as recommended by planners who emphasize not leaving match money unused.
• Navigate to the beneficiary designation section and verify or update beneficiaries for your retirement and employer‑provided life insurance, aligning with guidance that failing to update beneficiaries is a frequent oversight.

4. What “good” looks like:

• Your contribution rate meets or exceeds the level needed to receive 100% of the employer match available under your plan.
• All beneficiaries reflect your current situation (marriage, children, divorce, etc.), minimizing future disputes or misdirected benefits.

A myth worth clearing up

Myth: “If I just pick the most expensive health plan and stick with it every year, I’m guaranteed the best coverage and I don’t need to worry about open enrollment.”

Fact: Benefits experts caution that assuming the most expensive plan is the best is a major open enrollment mistake, because high premiums do not necessarily mean lower total costs or better fit for your situation. Guidance from USA Today and other planners stresses that choosing the same coverage mindlessly and focusing primarily on premiums can lead to overpaying and mismatched coverage. The recommended approach is to compare total potential costs (premiums plus deductibles, copays, coinsurance and out‑of‑pocket maximums) against your actual and expected usage each year.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.