Open enrollment is on the horizon and U.S. employers' health benefits costs are expected to increase to nearly 8% for 2025, the highest amount in more than a decade, according to a new survey by Business Group on Health. These rising costs come at a time when more than one-third of Americans are living paycheck-to-paycheck, so it is important during this enrollment period to help employees navigate health plan options that will offer cost-savings.

Consumer directed benefits like health savings accounts (HSAs) and flexible spending accounts (FSAs) offer employees a compelling way to access affordable healthcare, while also benefiting from pre-tax savings. And, with HSAs and FSAs, employees could save nearly 30% in taxes—a combination of federal income, FICA and potentially state income taxes—on every dollar contributed via payroll deductions.

Health account complexities erode account usage

Many eligible employees, however, opt not to take advantage of these benefits because of negative past experiences. The inconvenience of manual receipt uploads of receipts and long wait times for reimbursements often deter employees from engaging. Only about one-third of eligible workers enroll in high deductible plans with HSA or health reimbursement arrangement (HRA) savings options. To top it off, over half of Americans with FSAs are forfeiting unused contributions at the end of the year.