Open Enrollment Is Next Year’s Tax Return. You’re Signing It Now.

The email lands between meetings: Open enrollment closes in two weeks.

You open the portal. Medical, dental, vision. HSA. FSA. Life. Disability. Legal plan. Your 401(k). And if you're senior enough, a deferred compensation election with its own deadline and a PDF nobody reads.

At the bottom there's a button: Keep my current elections.

You click it. Ten minutes. Done.

Here's what that click actually did. It set how much of next year's pay gets taxed, and when. It decided whether your family is covered if you can't work. It decided which dollars land in accounts that grow tax-advantaged and which land in checking to get spent.

For many executives, it's one of the biggest tax decisions of the year, made in the time it takes to answer two emails.

Open enrollment isn't HR paperwork. It's next year's tax return. You're signing it now.

An election form is a contract with your future self

Before finance, I was a real estate litigation attorney. The fights I saw were almost never about what people meant. They were about what people signed.

Open enrollment works the same way.

Medical coverage and flexible spending accounts generally run through your employer's cafeteria plan, and those pre-tax elections are generally locked for the plan year. You can usually change them only with a qualifying life event: a marriage, a birth, a spouse's job change. "I changed my mind in March" typically isn't on the list.

Deferred comp is stickier still. A nonqualified deferred compensation election is generally irrevocable once the deadline passes, and the payout schedule you pick usually locks in with it.

Your 401(k) rate and HSA payroll contributions are usually more flexible during the year. But "I'll fix it later" is how later never comes.

And here's the twist: "keep my current elections" doesn't always keep them. In many plans, medical and 401(k) elections roll forward, but FSA elections reset to zero unless you re-elect them every year. Autopilot can quietly change things too.

A contract you didn't read is still a contract.

Why this hits executives harder

The benefits menu wasn't built for lumpy pay.

If nearly all your cash comp is base salary, autopilot does less damage. But many executives get paid in pieces: base, an annual bonus, RSU vests, maybe a deferred comp credit. That's where the defaults break.

A 401(k) set as a flat percentage behaves differently when a big bonus hits. A disability policy that only counts base salary covers a fraction of your actual life. A spouse's elections can knock out yours without anyone noticing.

None of that shows up on the enrollment screen.

The six elections that matter most (for many executives)

1. Your 401(k): rate, timing, Roth vs. pre-tax

Three questions, not one.

Will you hit the limit too early? If your deferral percentage applies to your bonus, you can max out by midyear. Some plans "true up" the employer match at year-end. Others don't. If yours doesn't, the match can stop the month you hit the limit. Ask HR one sentence: Does our plan true up the match?

Pre-tax or Roth? Compare your bracket today with your expected bracket when the money comes out. Not a feeling. A comparison.

If you're 50 or older, know the new catch-up rule. Under SECURE 2.0, if your prior-year FICA wages from your employer exceed an IRS threshold, your catch-up contributions must go in as Roth. For 2026, the test is 2025 wages above $150,000. It's indexed, and the IRS hadn't published next year's figure as of this writing. The final regulations generally apply starting in 2027. Translation: for many high earners over 50, catch-up dollars no longer lower taxable income. Plan the take-home and the withholding accordingly. And if your plan doesn't offer a Roth option, you may not be able to make catch-ups at all. Ask.

2. The HSA: the account many executives underuse

If you're on an HSA-eligible high-deductible plan, the HSA can be the most tax-efficient account you own. Contributions go in pre-tax, growth isn't taxed, and withdrawals for qualified medical expenses come out tax-free. Through payroll, contributions generally skip Social Security and Medicare tax, too.

For 2027, the IRS limits are $4,500 for self-only coverage and $9,000 for family coverage, plus an extra $1,000 if you're 55 or older.

Two traps:

• The spouse trap. If your spouse enrolls in a general-purpose health FSA at their job that can reimburse your expenses, it can make you ineligible to contribute to an HSA. Two portals, two people, one tax problem.
• The Medicare trap. Once you enroll in Medicare, HSA contributions stop. Working past 65? Coordinate the timing with your advisor before you sign up.

Some executives treat the HSA as a long-term account: pay small medical bills out of pocket, let the HSA stay invested, keep the receipts. That's a choice, not a rule. Just make it on purpose.

3. FSAs: use-it-or-lose-it means size it right

A health FSA is use-it-or-lose-it, though some plans allow a small carryover or a grace period. Fund it for expenses you're confident about (braces, glasses, a planned procedure), not a hopeful guess.

The dependent care FSA got bigger. Starting in 2026, the federal exclusion rose to $7,500 per household ($3,750 if married filing separately), if your employer adopted the higher limit. It generally covers care for kids under 13 so you can work.

Two cautions. The limit is per household, not per parent, so two working spouses can't each put in $7,500. And these plans sometimes fail nondiscrimination testing, which can cap what highly paid employees contribute. If HR trims your election midyear, that's usually why.

4. Disability: the gap nobody prices

Your ability to earn is probably your biggest asset. Many group long-term disability plans replace a percentage of salary up to a monthly cap, and many don't count bonus or equity at all. If half your cash comp is bonus, "60% coverage" may be a lot less than 60% of your life.

Then the tax angle. As a general rule, if your employer pays the premium, or you pay it with pre-tax dollars, the benefit you'd receive is taxable. If you pay the premium with after-tax dollars, the benefit is generally tax-free. Some plans let you choose. That small payroll line can decide whether a disability check covers the mortgage.

Look for four things: the monthly cap, what counts as "earnings," any buy-up option, and whether you need coverage outside work to fill the gap.

5. Life insurance: "free" isn't the whole story

Group term life is easy to keep and easy to over-trust.

First, the cost of employer-paid coverage above $50,000 is generally taxable to you. It shows up as "imputed income" on your pay stub. Not a reason to drop it; just know what it is.

Second, group coverage usually goes away, or gets expensive, when the job does. If your family's plan depends on it, your plan depends on your employment.

And while you're in there, check the beneficiary. The form beats the will.

6. Deferred comp: the election with the longest tail

If your company offers a nonqualified deferred compensation plan, the election for next year's pay often lands in this same window, and plan deadlines can come before December 31. Once made, it's generally irrevocable for the year, and you typically lock in when and how you'll be paid at the same time.

We've covered this one in depth: why you're really making an unsecured loan to your employer and how to decide how much to defer. The short version: decide how much your employer can owe you, unsecured, and pick the payout schedule before you pick the percentage.

A hypothetical: what autopilot looks like

Meet Dana. She's hypothetical and illustrative, not a client. Fifty-two, married, two kids, a big annual bonus and RSUs on top of base. She clicks "keep my current elections" in eight minutes.

Here's what she didn't see:

• Her 401(k) percentage applies to her bonus. She hits the limit by summer, and her plan doesn't true up the match. Months of match, gone.
• She's over the wage threshold, so her catch-up contributions go in as Roth. Her take-home dips and her withholding plan never accounted for it.
• Her husband signed up for a general-purpose health FSA at his job. Her HSA contributions may no longer be allowed, and nobody notices until the CPA asks in April.
• Her disability coverage counts base salary only. About half her cash comp is uncovered.
• Her dependent care FSA reset to zero because she didn't re-elect it.
• Her deferred comp payout is a lump sum at separation, picked years ago, likely landing in the same year as a severance check and a final bonus.

None of that is a market call. None of it takes genius. It takes an hour and the right questions.

The working session: your dated checklist

Run this with your spouse or partner, your CPA, and your advisor. It's not personalized advice from a blog post. It's a shared agenda.

This week (October 19–23)

• Find your open enrollment deadline. Then find the deferred comp deadline separately; it may be earlier.
• Download the plan summaries: medical, HSA/FSA, disability, life, 401(k), and the NQDC enrollment packet.
• Pull your last pay stub and sketch next year's comp: base, target bonus, expected RSU vests.
• Get your spouse's benefits menu too. Same table, same session.

Before your deadline

• Book one hour with your CPA or advisor. Bring everything above.
• Decide your 401(k) rate, Roth vs. pre-tax, and whether the plan trues up the match.
• Decide HSA and FSA amounts as a household, not as two individuals.
• Check disability: cap, earnings definition, premium tax treatment, buy-up.
• Make the deferred comp election on purpose: amount and payout schedule.
• Submit. Download the confirmation. File it with your tax records.

First paycheck in January

• Check the stub line by line. Elections post wrong more often than you'd think, and January is when it's easiest to fix.

Calendar it now

• Midyear: check your 401(k) pace against the limit and the match.
• Next September: block an hour for open enrollment prep before the email arrives.

Boring is the goal. A boring open enrollment is one you never have to unwind.

The decision rule

For every election, ask one question: Can I explain why this number is this number?

If the answer is "because it was last year's," that's not a decision. It's a default.

Rules over feelings.

Run the numbers before you sign

If deferred comp is on your list this fall, our NQDC calculator models how much to defer and how the payout schedule changes the tax picture.

If your pay is a mix of salary, bonus, RSUs, and deferrals, the Executive Comp Optimizer puts the pieces in one place.

And if you'd like a second set of eyes before your deadline, start a conversation. Educational conversation, not a product pitch.

Jason C. Hilliard, J.D.