Tech Employee Open Enrollment Checklist 2026

Open enrollment is the one moment each year when you can rewire how your compensation flows. Most tech employees spend 15 minutes clicking through the benefits portal and call it done. That's a mistake that can cost $5,000–$25,000 in after-tax income per year at a senior level — not from choosing the "wrong" health plan, but from leaving adjacent elections untouched.

This checklist covers the six elections that actually move the needle for tech workers earning $200K+. The health plan is just one of them.

Election 1: Health insurance — HDHP vs. PPO

The health plan choice drives everything downstream: your HSA eligibility, your employer seed contribution, and your out-of-pocket exposure. For most healthy tech employees earning $200K+, an HDHP with a maxed HSA dominates a PPO — but the math matters.

How to compare: Calculate the total economic cost under each plan, assuming average utilization for your situation:

For a healthy 30-something at a senior IC level, the HDHP premium savings ($2,000/yr) plus the HSA tax benefit ($1,628+ self-only) frequently exceeds the deductible gap — especially when you bank receipts and reimburse yourself years later tax-free from an invested HSA. See the HSA as stealth IRA guide for how this compounds.

When PPO wins: If you're planning a baby, managing a chronic condition, or your spouse is a heavy healthcare user, run the full math with expected out-of-pocket. An HDHP's $8,500 out-of-pocket maximum (2026, self-only) can flip the calculation. For family coverage with predictable high utilization, PPO often comes out ahead even after the HSA tax benefit.

The OBBBA change for 2026: Starting January 1, 2026, Bronze and Catastrophic ACA plans are HSA-compatible. Bronze-plan employees who previously couldn't contribute to an HSA may now qualify — check whether your employer's offerings changed.²

Election 2: HSA contributions — set to the maximum

If you elect an HDHP, set your HSA contribution to the 2026 limit on day one of enrollment. Don't leave this at a default lower amount.

Your employer's HSA seed contribution counts toward these limits — net your contribution accordingly. If your employer contributes $750, you contribute $3,650 (self-only) to hit the max.

If your employer routes HSA contributions to HealthEquity or Optum (common at Amazon, Meta, others), you can contribute through payroll to capture the FICA exclusion — Social Security and Medicare taxes are not withheld on payroll-routed HSA contributions, which IRA contributions don't get. At $4,400, that's $337 in FICA savings on top of the income tax deduction.

Election 3: ESPP — enroll if offered, understand the math first

If your company offers a Section 423 ESPP, enrolling is almost always correct for the immediate-flip strategy — but enrollment elections are typically only available during open enrollment windows.

The basic math: A §423 ESPP with a 15% discount and look-back provision means you buy stock at 85% of the lower of the grant date or purchase date price. Even if the stock goes flat, you capture a ~17.6% return on capital deployed over the 6-month offering period. That annualizes to ~35% risk-free — which is why most financial advisors recommend immediately selling the shares on purchase date (a disqualifying disposition, taxed as ordinary income on the spread, but FICA-free after purchase).

The one reason to skip enrollment: if you're at a company where ESPP contributions come from base salary and would force you to reduce 401k deferrals below your employer match threshold. In that case, get the match first, then ESPP.

The $25,000/year FMV cap (per §423) limits your maximum tax-preferred contribution regardless of salary. The ESPP after-tax calculator shows the flip vs. hold comparison for your specific numbers.

Election 4: 401(k) contribution rate — maximize, then set up Mega Backdoor Roth

Open enrollment is often when tech companies let you change your 401(k) deferral rate and configure the after-tax contribution bucket needed for the Mega Backdoor Roth. These are sometimes separate elections on the same portal.

2026 401(k) deferral limits:³

Mega Backdoor Roth setup: The 2026 total 415(c) limit is $72,000 per participant. After your pre-tax/Roth deferrals and employer match, the remaining room can be filled with after-tax contributions that you immediately convert to Roth — either via in-plan Roth conversion or rollover to a Roth IRA. For a senior engineer with a $16,500 employer match, the after-tax bucket can be up to $31,000.

Not all companies support this — check whether your plan document allows after-tax contributions and in-plan Roth conversions. Google, Microsoft, Meta, and many mid-stage startups (via Fidelity or Vanguard) support it; Amazon's 401k does not currently offer the in-plan conversion option. See the Mega Backdoor Roth calculator to find your exact space.

Election 5: NQDC deferral — the most time-sensitive election

Non-Qualified Deferred Compensation (NQDC) plans — offered primarily at large public tech companies (Google, Salesforce, HP, Cisco, others) — allow you to defer up to 50–100% of base salary and bonus into a pre-tax account that grows without current taxation. This is above and beyond the 401(k) limit.

Why this election is different: Under §409A of the tax code, NQDC deferral elections must be irrevocably made before December 31 of the year preceding the deferral year.⁴ You cannot change your election after December 31 — even if your income changes dramatically. If you miss the window, the opportunity is gone for that entire year.

You must also elect at enrollment time: when you want to receive the deferred amounts (separation from service, a fixed date, change of control, or an unforeseeable emergency). This distribution election is also irrevocable without a compliant modification.

When NQDC deferral makes sense: If you expect to be in a meaningfully lower tax bracket when you receive the distributions (retirement, sabbatical, career change), deferral saves the spread. At 37% federal + 13.3% California = 50.3% marginal rate deferring to a 22% + 9.3% = 31.3% retirement rate, that's 19 points of tax arbitrage per dollar deferred. See the NQDC guide for the full §409A mechanics and unsecured creditor risk.

Election 6: Life and disability insurance — close the equity comp gap

Group life and long-term disability (LTD) coverage from your employer are almost always based on base salary only. For tech employees where equity makes up 40–60% of total compensation, this creates a large protection gap.

Life insurance gap: Group life is typically 1–2× base salary. At a $250K base, that's $250K–$500K of coverage — while your HCOL mortgage may be $1.5M+ and your dependents' financial need is based on your $450K total comp. Open enrollment is typically the only time you can buy supplemental life coverage without evidence of insurability (no medical exam). At 30–40, the incremental premiums are low. Take the maximum guaranteed-issue amount offered.

Disability insurance gap: Employer-paid group LTD typically covers 60% of base salary, capped at $10,000–$15,000/month. It excludes RSU income, bonus, and ESPP proceeds. At a $420K total comp with $170K in base, the policy covers $8,500/month — far below your actual income or savings rate. And because your employer pays the premium, those benefits are fully taxable as ordinary income when paid (IRC §104/§105).

Open enrollment is often when supplemental disability coverage is offered on a guaranteed-issue basis. If individual high-limit DI (up to $35K/month own-occupation policies are available separately) is part of your plan, the evidence-of-insurability-free window at your company is valuable — see the disability insurance guide for how to size coverage. For life insurance sizing, see the life insurance guide.

Priority order if you can't do everything at once

At most companies, you're making all six elections simultaneously. But if budget forces trade-offs (e.g., HSA max vs. ESPP contribution reduces take-home cash), here's the priority stack:

1. Get the full employer 401(k) match first. That's an immediate 50–100% return on dollars deferred. Non-negotiable.
2. Max the HSA if on an HDHP. Triple tax advantage + FICA exclusion. Every dollar here is worth more than a dollar in a brokerage account.
3. ESPP enrollment if it doesn't crowd out match or HSA. The risk-free return on the 15% discount justifies full enrollment for an immediate-flip strategy.
4. After-tax 401(k) / Mega Backdoor Roth if your plan supports it. $30K+ of Roth space per year is hard to replicate.
5. NQDC deferral if you're at a large public tech co with meaningful tax arbitrage. Don't defer if you might need the liquidity — the NQDC is an unsecured creditor claim.
6. Supplemental life and disability to close the equity-income gap. Do this at your first enrollment window when it's guaranteed-issue, not later when medical underwriting applies.