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Local PEO Benefits Enrollment

How Should a Small Texas Business Prepare for Open Enrollment?

Lone Star PEO
Lone Star PEO
How Should a Small Texas Business Prepare for Open Enrollment?
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Start in October (if you haven't already) on the four most important things that need to be done before the enrollment window opens. First, a review of this year’s plan against what it cost and covered. Second, an eligibility audit. Third, the required employee notices. And finally, a firm election calendar. Plan changes, carrier negotiations, and notices all have lead times that should not wait until November.

Preparation also allows a growing business to change the benefits. A 30-person company buying coverage alone will rarely match what candidates are being offered elsewhere, but through a professional employer organization, the same company offers benefits priced for a group far larger than its own headcount. Using enrollment to build an offer that competes is the second half of the job.

Why does open enrollment prep start in early fall?

Because every decision that matters is due 60 to 90 days before the window opens. Carrier renewals arrive with deadlines attached, and evaluating them takes time: comparing plan designs, checking what employees actually used this year, and negotiating or shopping alternatives if the renewal number is bad. A business that starts in October is basically limited to one real option, which is renewing whatever it already has at whatever price arrives.

Fall is when the administrative groundwork still fits into a normal workweek. Eligibility rules, waiting periods, and dependent documentation can be reviewed calmly in fall. In the last week of October, the same work causes stress and might lead to overtime.

What has to be ready before the enrollment window opens?

Four things, and each one has a deadline that arrives before employees pick a plan:

01

A plan review. What this year’s coverage cost, what employees used, and where the renewal quote stands against alternatives.

02

An eligibility audit. Who qualifies, who has aged out, whose hours have changed, and whose dependent documentation needs updating.

03

The required notices. Medicare Part D creditable coverage notices are due to eligible employees by October 15, and Summaries of Benefits and Coverage must be in employees’ hands when enrollment opens.

04

A firm election calendar. When the window opens, when it closes, how elections are collected, and who chases the stragglers.

Miss the notices and you have a compliance problem. Miss the calendar and you have a payroll problem in January, when deductions don’t match elections. Both are avoidable with a timeline that exists on paper in fall.

Can a small company’s benefits actually compete?

Yes, if it stops buying coverage alone. A small group buying health insurance on its own pays small-group rates for small-group plan designs. Through a PEO, employees join a benefits pool priced for a group far larger than any one client company, which puts big-company coverage in a small-company offer letter at the same salary.

Open enrollment is when this switch is cheapest to make, because employees are changing plans anyway. Moving to better coverage during the enrollment window means one transition instead of two, and it means the next candidate your company competes for sees the stronger offer.

Does Texas change any of this?

Not the deadlines. Texas has no state health insurance mandate and no state-run exchange, so the calendar binding a Texas employer is the federal one: Medicare Part D creditable coverage notices by October 15, Summaries of Benefits and Coverage when the window opens, and ACA reporting after the plan year closes. There’s no state layer, which also means there’s no state deadline to hide behind.

What Texas changes is who you’re hiring against.

A 30-person company in San Antonio, Austin, Dallas, or Houston competes for the same people as employers ten times its size, and that’s in metros where those employers are hiring hard. The benefits line on an offer letter has more impact in that market than it would in a smaller one.

What does enrollment season cost the people who run it?

More than the premiums. Employees who aren’t HR professionals spend an average of 13 hours a week on payroll, compliance, and onboarding work, and enrollment season stacks eligibility tracking, notices, elections, and carrier reconciliation on top of that. Across the country, small businesses spend an estimated $27 billion a year on staff handling HR alongside the job they were actually hired for.

13 hours

A week, spent by non-HR employees on payroll, compliance, and onboarding.

$27 billion

Spent annually by US small businesses on staff handling HR alongside their real jobs.

$1,775

Average savings per employee, per year, after moving to a PEO. Source: NAPEO.

The savings run the other direction, too. NAPEO, the national association of professional employer organizations, puts the average savings at $1,775 per employee per year for businesses that move to a PEO. At 25 employees, that’s more than $40,000 a year, arriving alongside benefits options the company couldn’t have bought alone.

What changes when a PEO owns the calendar?

The calendar stops being your problem. Lone Star PEO runs open enrollment every year: the plan review, the eligibility audit, the notices, the election tracking, and the payroll reconciliation afterward, with benefits, payroll, compliance, and workers’ compensation handled under one agreement. Every client has a named representative from day one, someone who knows the plans, the deadlines, and your people, which matters most in the weeks when everyone has a question at once.

ABOUT LONE STAR PEO

A licensed Texas PEO, founded in 2016 and based in San Antonio. NAPEO member. ESAC accredited. Backed by a 90-day money-back guarantee.

We’re not big business, we’re your business.

Find out what the numbers look like at your headcount

Before this year’s renewal locks you into another year of the current setup, find out what the numbers look like at your headcount. A free cost analysis puts a real figure on the hours, the overhead, and the annual savings a PEO would produce for your business.

Request a Free Cost Analysis

Prefer to talk it through? Reach the San Antonio office at (210) 496-7827 or through the contact page.

Frequently asked questions

What is open enrollment for a small business?

Open enrollment is the annual window when employees choose or change their benefit elections for the coming plan year. Outside that window, employees can generally only make changes after a qualifying life event, which is why the calendar matters and why late elections create payroll problems in January.

When should a small business start preparing for open enrollment?

Sixty to ninety days before the enrollment window opens. For a November enrollment, that means starting the plan review and eligibility audit in late summer and early fall, so renewal decisions and required notices are done before October.

What notices are required before open enrollment?

Medicare Part D creditable coverage notices are due to Medicare-eligible employees by October 15 each year, and Summaries of Benefits and Coverage must be provided when enrollment opens. Plan documents and any change notices come with their own timing. A PEO tracks and sends these as part of running enrollment.

Do small Texas businesses have to offer health insurance?

Under the ACA, employers with fewer than 50 full-time equivalent employees are not required to offer health coverage, and Texas does not add a state mandate on top of that. Most small Texas employers offer it anyway, because the benefits line is what an offer letter competes on.

Can a company with fewer than 50 employees get large-group benefits?

Through a PEO, yes. PEO clients join a benefits pool priced across a much larger group than any single client company, which is how a 30-person business offers coverage comparable to a national employer’s.

How long does it take to move to a PEO before enrollment?

Timing the move to your benefits renewal date keeps the widest set of plan options open. Starting in late summer or early fall leaves room to complete a transition before a November window.

How much does a PEO actually save?

NAPEO’s research puts the average at $1,775 per employee per year, counting administrative time, benefits pricing, and reduced penalty exposure. A cost analysis replaces that average with the specific number for your headcount.

Notice deadlines and coverage requirements described here are general information, not legal or tax advice. Confirm current requirements with CMS, the IRS, or your benefits counsel.

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