Recent employee trends in health plan and supplemental benefits: What employers should know

As employers invest a lot of resources into their workplace benefits, employee disengagement continues to be an ongoing challenge for HR teams. To help address this challenge, employers can develop a strategy using data from Benefitfocus’ 2025 State of Employee Benefits. This report covers a wide range of data points, but this article will focus on two key employee trends — the decrease in Health Savings Account (HSA) participation and the increase in supplemental benefits participation. Employers can use this information to consider next steps in their workplace benefits strategy.

Trend #1: HSAs are losing popularity among older employees

The State of Employee Benefits report looks at High-Deductible Health Plan (HDHP) and Health Savings Account (HSA) participation across five generations: traditionalists, baby boomers, Gen X, millennials and Gen Z. Since 2023, HDHP participation has increased among Gen X, millennials and Gen Z. However, Gen Z is the only age group that also increased its participation in HSAs.

HSA participation rates by generation, year-over-year

This disparity suggests a potential gap in understanding the value of HSAs. Employees can benefit from HSAs because of their triple-tax advantages and their ability to keep any unused funds in their accounts each year. Balances are never forfeited and can be used for eligible expenses at any point in the future, including in retirement, as long as there are funds in the account. Additionally, in retirement, funds can be used for non-eligible expenses and taxed as “normal income.”

The value of HSAs also extends to employers. When employees contribute to HSAs, an employer pays less Federal Unemployment Tax Act (FUTA) payroll taxes. Therefore, closing this knowledge gap of HSAs can be a worthwhile initiative for everyone involved.

3 tips to close the knowledge gap

Increasing awareness and literacy around HSAs can be an effective strategy to help increase employee participation. As a result, this may help give employees an opportunity to improve their financial outcomes in their later years. Here are a few tips to close the knowledge gap around HSAs:

1. Recognize your employees’ concerns – Employees may forgo an HSA for different reasons. Some employees have other financial priorities and feel they can’t afford to fund an HSA. Others may pass on an HSA because of a common myth or misconception they learned from a peer or previous employer. For instance, a 2023 Voya Financial Consumer Insights & Research survey revealed that 50% of employees were unaware that HSA balances can be carried over each year.¹ Understanding some of these concerns and misconceptions can help you build a more impactful HSA-focused action plan.
2. Deliver targeted communications – Consider opportunities to create targeted communications about HSAs based on your employees’ needs and preferences. Targeted communications can also be created around personal circumstances, such as preparing for parental leave.
3. Offer personalized guidance – Selecting benefits can be an overwhelming process for some employees who aren’t familiar with complex terms. Some employees may select the same benefits year after year, even if there are other options like HSAs that can support optimal care. Decision support tools can be used to provide employees with personalized guidance when selecting their benefits. These tools are intended to help employees make informed decisions about their benefits, based on their current lifestyle and goals.

Trend #2: Supplemental health and voluntary benefits are gaining popularity among all employees

The State of Employee Benefits Report also contains data on participation rates in supplemental health and voluntary benefits. Accident Insurance (ACC), Critical Illness (CI)* and Hospital Indemnity (HI) insurance plans were the most offered by employers and had the highest participation rates among all generations, compared to Legal coverage, Identity theft protection and Pet insurance. ACC and CI showed continued growth in participation rates, which may suggest that employees see the value in mitigating the financial impact of unexpected events such as a covered illness or resulting injury and treatment from a covered accident.

The positive impact of voluntary benefits

Research from Benefitfocus shows continued growth in voluntary benefits offerings and participation, yet some employers may still question the value. Both employers and employees might not have a full understanding of how supplemental offerings can provide mutual benefits. Here’s a look at the positive impact they can have:

• Supports talent attraction and retention – A 2024 Voya Health and Benefits survey revealed that 83% of employees are more likely to work for an employer that offers CI, HI, disability income insurance or ACC.² Voluntary benefits may be especially effective at attracting certain demographics, such as Gen Z, millennials, employers in lower income households and women. These groups generally consider voluntary benefits more important.
• Helps minimize financial impact for employees – For some employees, an unexpected illness or injury creates out-of-pocket medical expenses that can impact savings or retirement goals. Voluntary benefits can help minimize this financial impact by providing a benefit for a covered event that can then be used towards out-of-pocket medical expenses, offering the potential to help employees to protect their savings or retirement funds.
• Increases benefit offerings for minimal costs – Voluntary benefits can be an effective way to provide additional benefits to employees without a lot of additional cost to employers. Employees can choose the voluntary benefits that meet their needs and pay the full premium. Some employers may opt to provide some benefits and/or enable employees to buy up or purchase additional coverage. Costs to employers may include administrative fees and minor ancillary costs, such as the time and resources spent on communicating and educating employees.

These recent trends in health plan and supplemental benefits reveal a few key opportunities for employers to take. First, employers may wish to consider strategies to communicate and educate on HSAs, particularly with older generations. Giving employees knowledge around HSAs can help them determine whether they’re selecting benefits that will support their health and savings goals. Employers may also want to consider the value of voluntary benefits for their organization. Offering employees such insurance coverages as Accident, Critical Illness and/or Hospital Indemnity can be a mutually beneficial strategy that is intended to help lessen the financial impact of covered events and support employees’ financial well-being.

To learn more about how Voya can help you develop impactful benefits strategies and experiences for your employees, contact your Voya representative today.