Younger workers shift to HDHPs, prompting employers to offer wider options

High-deductible health plans, often combined with health savings accounts, are most popular with younger employees drawn by their lower premiums. Many employers are responding with a wider range of health insurance options to fit all life stages.

“The decisions around identifying the right benefits at every stage in life are nuanced and personal, and employers have the ability to help meet those specific health care and benefits needs for every employee,” said Andrew Frend, president of the benefits administration provider Benefitfocus. “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.”

Forty-five percent of Gen Z employees are participating in high-deductible plans this year, followed by millennials (43%) and Gen X (30%), according to the company’s 2024 State of Employee Benefits report.

Employers continued to expand health insurance options for employees this year, with 84% offering a combination of traditional and high-deductible health plans. This gives workers across generations and circumstances more options to manage their health care and financial needs. Relatively few employers are offering solely a traditional (15%) or high-deductible health plan (1%).

The report highlights the importance of employers understanding 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 a choice of plans. Although 64% of enrollees selected a traditional plan in plan this year, enrollment in high-deductible plans is increasing across most generations.
• Offer solutions to help employees across all generations manage health care costs. Although the employer share of premiums was 78% for plan year 2024, up from 74% in 2022, employees also face higher costs, a challenge that can be addressed by considering generational differences.

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• Raise awareness. According to Voya research, only 3% of working Americans surveyed understood the full benefits of HSAs by correctly selecting all options (compared to 2% in 2020). This suggests that employees need more effective education, guidance and support to consider how one choice might affect 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 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,” Frend said. “It’s essential that employers understand what employees are looking for in a benefits program.”