Participation in high-deductible health plans is highest among Gen Z

Benefitfocus, one of the leading benefits administration providers in the industry, announced today the release of its “2024 State of Employee Benefits™ Report,” a detailed look at how employers support today’s workforce through workplace benefits and savings programs.

“As employers evolve their workplace benefits and savings offerings to optimize outcomes and help manage increasing health care costs, the need for a holistic benefits package that supports a diverse workforce is necessary to remain competitive,” said Andrew Frend, president of Benefitfocus. “It’s essential that employers understand what employees are looking for in a benefits program. By leveraging data and insights, employers have a great opportunity to offer what their employees need.”

Across industry research, many findings show health care continues to be one of the most important employee benefits.¹ The Benefitfocus report uncovered that for the 2024 plan year, employers continued to expand health insurance options for employees, with 84% of employers offering a combination of traditional health plans and high-deductible health plans (HDHPs) — giving workers across generations and circumstances more options to manage their health care and financial needs.

Notably, the report shows that participation in HDHPs in 2024 — often coupled with health savings accounts (HSAs) — is highest among Gen Z employees (45%), followed closely by millennials (43%) and Generation X (30%). This data suggests Gen Z’s relatively larger adoption of HDHPs may be a result of younger employees gravitating toward lower premiums (i.e., lower monthly costs of HDHPs) and potentially less financial burden.

The report also finds relatively few employers are offering solely a traditional (15%) or high-deductible health plan (1%), which suggests the need to support an individual’s health care and financial wellness needs influenced by life stage. As a result, Benefitfocus suggests that employers should consider more personalized solutions to help employees across all generations manage their health care costs.

“The decisions around identifying the right benefits at every stage in life is nuanced and personal, and employers have the ability to help meet those specific health care and benefits needs for every employee,” added Frend. “Employers that identify these distinct needs and create a more targeted approach to benefits management, education and communications have the opportunity to attract and retain multigenerational teams and promote better health and wealth for their employees.”

In addition to generational trends, the Benefitfocus report highlights the importance for employers to understand what employees are looking for in a benefits program, which can support a greater approach to overall benefits enrollment, utilization and, ultimately, cost savings for employers and employees. Based on additional report findings, key areas of focus for today’s employers include:

• Help employees make optimal health plan selections. More than 8 in 10 employers offer their employees their choice of HDHP and traditional plans. While 64% of health plan enrollees selected a traditional plan in plan year 2024, enrollment in HDHPs is increasing across most generations.

• Offer solutions to help employees across all generations manage health care costs. While employer share of premiums was 78% for plan year 2024, up from 74% in plan year 2022, employees are also faced with higher costs — a challenge that can be addressed by considering generational differences.

• Raising awareness of HDHP and HSAs remains critical. According to Voya research, only 3% of the working Americans surveyed understood the full benefits of HSAs by correctly selecting all options (compared to 2% in 2020), ² suggesting that employees need more effective education, guidance and support to consider how one choice might impact another.

• Consider voluntary benefits that add value to employees’ whole-person well-being. Employees across all generations are taking advantage of accident, critical illness/specified disease and hospital indemnity insurance, along with ID theft, legal and pet benefits, as some of these more voluntary solutions can help employees minimize the financial impact of specifically covered events, such as an illness or hospitalization.