Annual enrollment: A strategic opportunity to engage, educate, and empower

Annual enrollment is a key moment to guide employees in choosing spending accounts that support their health, finances, and goals while boosting engagement and financial wellbeing

Annual enrollment isn’t just a time for employees to select their benefits, it’s a rare moment when they’re actively thinking about their health, finances, and future. In 2025, with rising inflation, increased financial stress, and a growing demand for personalized support, this window is more critical than ever.

According to the 2025 WTW Benefits Trends Survey, only 42% of employees feel confident navigating their benefits, yet 78% say they’re more likely to engage when they understand how benefits meet their personal needs. This reflects a massive opportunity for employers to step in with clarity, empathy, and actionable guidance.

Spending accounts: The cornerstone of financial wellbeing 

Health Savings Accounts (HSAs), Health Care and Dependent Care Flexible Spending Accounts (FSAs), and Lifestyle Spending Accounts (LSAs) offer employees ways to manage healthcare, dependent care, and life expenses while helping employers control costs and boost engagement. During annual enrollment, these accounts should be front and center in your communications strategy to show how employees can use them to address their unique needs, whether that means adjusting contributions for anticipated medical expenses, choosing coverage that fits their family's situation, or selecting benefits that support their physical, emotional, and financial wellbeing.

Health Savings Accounts (HSAs) 

HSAs pair with high-deductible health plans and offer triple tax advantages: pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. For 2026, the contribution limits increased to $4,400 for self-only coverage and $8,750 for family coverage, making HSAs a powerful tool for both short-term savings and long-term retirement planning. Employees can personalize an HSA by adjusting contributions based on anticipated medical expenses—like setting aside more when planning for a surgery or a family’s growing healthcare needs. For those focused on long-term planning, employees can contribute even more and invest unused money for future medical costs.

Health Care Flexible Spending Accounts (FSAs) 

Health Care FSAs allow employees to set aside up to $3,400 (2026 maximum) tax-free for medical, dental, vision, and prescription expenses. Employees who know they’ll need orthodontia for a child can allocate FSA funds for those costs, while others may budget for routine prescriptions or annual eye exams. For families with predictable medical expenses, setting FSA contributions to match expected out-of-pocket costs ensures optimal tax savings and financial planning tailored to their situation.

Dependent Care Flexible Spending Accounts (FSAs) 

Personalization can include enrolling in a Dependent Care FSA if employees have young children in daycare or an aging parent who needs support. Starting in 2026, employees can contribute up to $7,500 to a Dependent Care FSA to help cover child and elder care costs. These accounts reduce taxable income and provide immediate financial relief for everyday expenses.

Eligible expenses are those that enable employees (and their spouse, if applicable) to work or look for work. Examples include payments for daycare centers, after-school care, babysitters, and elder care programs that provide supervision while employees are at work. However, costs for enrichment programs whose primary function is not custodial care, such as music lessons, sports camps, or private tutoring, are not eligible. It’s important that employees review plan documents to confirm which expenses qualify.

Lifestyle Spending Accounts (LSAs) 

LSAs support broader goals, reimbursing employees for fitness memberships, mental health apps, financial coaching, and more. Employees can personalize LSAs by using funds to pay for activities or services that best support their individual wellness—for example, joining a yoga studio to manage stress, subscribing to a meditation app, or working with a financial advisor to plan for a major life event. Someone focused on physical health might use the account for race entry fees or nutrition counseling, while another employee could prioritize mental health or financial wellness, customizing their benefits to match personal goals and challenges.

What employers should focus on during enrollment 

Cover the basics  
It’s important that employees understand the basics of these types of accounts, like the tax advantages, contribution limits, and how or when money in the accounts can be used. Use enrollment communications to help employees understand the details of each account, and how each account benefits them immediately and in the future.

Connect benefits to life goals 
Whether it’s budgeting for childcare expenses, saving money for a planned medical procedure, or improving their physical wellbeing, help employees see how their benefits align with what matters most to them. Use this opportunity to help employees understand how to use accounts to personalize their benefits package.

Empower managers to be benefit ambassadors 
Equip leaders with talking points and resources so they can reinforce messages and guide their teams during enrollment.

Best practices for enrollment communication 

• Start early and communicate often 
  Don’t wait until the enrollment window opens. Begin building awareness weeks in advance with teaser campaigns, webinars, and FAQs. 

• Use multiple channels 
  Email, intranet, mobile apps, and even physical mailers can reach different segments of your workforce. Consider short videos or interactive guides for complex topics. 

• Make it personal 
  Use data to segment communications by age, life stage, or benefit usage. Personalized nudges, like reminders to enroll in an HSA or update dependent care FSAs, can drive action. 

• Follow up after enrollment 
  Reinforce choices with post-enrollment summaries and tips on how to use benefits throughout the year. This keeps the momentum going and builds long-term engagement. 

By treating annual enrollment as a strategic moment, not just a transactional one, employers have a powerful opportunity to deepen trust, boost retention, and empower employees to make informed choices for their wellbeing. When communications clearly show how benefits can be tailored to meet each employee’s individual needs and life goals, engagement increases. In a year marked by heightened financial stress and rising expectations around benefits, demonstrating the personal relevance of each account helps employees see real value in their choices. Lead with empathy and impact by guiding employees to understand exactly how their benefits can support what matters most to them, driving not only smarter decisions but greater long-term participation and satisfaction.