Each year during open enrollment, employees are faced with a maze of options and confusing plan details. Without clear direction, many default to what feels “safe”: the most expensive health plan on the table. On the surface, it looks like a responsible decision. In reality, it often results in over-insuring, paying for more coverage than is realistically needed, and that choice comes with a steep financial cost.

For employees, the cost of over-insuring can reach thousands of dollars per year. Premium differences between a high-cost PPO and a moderate-premium HDHP typically range from  $2,000 to$3,000 annually. Factor in the missed opportunity to fund an HSA with pre-tax dollars, and the true impact climbs even higher. Over the course of a decade, households can lose $25,000 to $40,000 in potential savings and wealth-building opportunities.

But employees aren’t the only ones paying the price. Employers also absorb these inflated costs. Every dollar an employee overspends in premiums translates to higher employer contributions and higher total plan spend. That waste erodes ROI on benefit programs and diminishes the value of the investment you’ve made in offering a competitive benefits package.

The underlying issue is rarely that employees don’t care; it’s that they lack proper guidance. Complex enrollment tools, lengthy surveys, and siloed experiences often lead them toward default choices rather than optimal ones. Fear and confusion drive decisions, and in the absence of clarity, “more expensive” feels like “more secure.”

Here, smarter benefits guidance can create a measurable impact. By eliminating friction and presenting employees with clear, side-by-side comparisons that show not only premiums but also expected out-of-pocket costs and tax advantages, employees can confidently choose the plan that best fits their actual needs. When the process is simple, employees make better decisions.

The payoff is twofold. Employees save money and reduce financial stress, building greater trust and satisfaction with their employer. At the same time, employers and brokers see more efficient plan utilization, stronger enrollment in supplemental benefits, and improved ROI on their overall benefits investment.

The message is clear: smarter benefits guidance isn’t a “nice to have.” It’s a critical strategy for reducing waste, empowering employees, and delivering measurable value from your benefits program. Every dollar that’s not lost to over-insuring is a dollar that can be reinvested—whether in HSAs, retirement accounts, or simply in employee well-being.

Join our upcoming webinar: Driving Supplemental Utilization with Survey-less, Silo-less Guidance. Or simply click here to schedule a 30 minute chat.

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