Credit: fizkes/Adobe Stock
Despite a hefty spend of roughly $3 trillion on employee benefits, many programs are underused and undervalued by employees, according to Nayya’s 2025 Benefits Value Gap Report.
The report called the current benefits system a ‘massive financial waste’ built on broken incentives and obsolete design and said without modernizing the entire process, that investment may be doing more harm than good.
Recommended For You
The survey of 500 benefits-eligible employees revealed that nearly three-quarters of employees stay with the same benefits choices year after year. Even after major life changes, including health diagnoses and salary shifts, employees tend to leave valuable savings and protections on the table, said Nayya. Only 14% of the employees who do make changes to their benefits each year actively seek new benefits options.
“We’re past the point where offering benefits alone is enough,” said Sarah Liebel, President and COO of Nayya, which uses artificial intelligence to simplify complex benefits experiences. “The system is bloated, broken, and confusing by design.”
The dynamic has left HR leaders frustrated as benefits become more expensive while employees remain disengaged, skip critical preventative care or face unexpected financial burdens despite having coverage. Health care spending is projected to increase by an average of 10% this year, its highest level in over a decade, said the report.
Nayya found that employers spend, on average, $16,500 per employee on health benefits, but 25% of employees believe those benefits are worth $1,000 or less. Only 10% of workers accurately understand the value of the benefits provided to them, said Nayya.
Voluntary offerings like accident, hospital indemnity and legal plans are typically used by less than 30% of employees, the survey found. Pharmacy benefit managers once engaged to lower prescription drug costs are now sometimes causing those prices to inflate. Furthermore, employers spend between $50 and $70 per employee per month managing enrollment and administrative tasks related to benefits, said the report.
Nearly half of employees can’t explain core benefits like health spending accounts, flexible spending accounts or their 401(k), the survey found. About 40% of employees don’t think of benefits as part of their compensation plan at all, and one in five employees reports being actively dissatisfied with the value of their benefits.
Nayya said employers should rethink how benefits are delivered by focusing on personalization, guidance and clarity to help improve understanding, drive utilization and reduce waste.
“Companies that take this data-driven approach can expect higher workforce satisfaction and less administrative burden, as employees are empowered to make informed decisions without relying heavily on HR teams,” the report said. “Without dramatically changing their benefits offerings, employers can drive better outcomes, improve satisfaction, and maximize the return on their benefits investment.”
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
