More than 170 million Americans have wrapped up the same excruciating task: choosing their benefits for next year. What should be a straightforward process is instead one of the most burdensome and confusing times of the year.
Employees must navigate an overwhelming array of disconnected choices — from health insurance and voluntary benefits to retirement planning. This piecemeal approach around holistic needs creates stress and anxiety, often leading to analysis paralysis, decision fatigue, and frustration.
The consequences extend beyond employees. Employers see lower employee satisfaction, reduced productivity, and higher turnover. Beyond that, employers are not seeing meaningful movement in lowering the total cost of care. For health plans, the fallout includes fewer products and lower revenue per employee, higher churn due to weaker customer relationships, and continued price wars among plans in an effort to take share.
Health insurers have an opportunity to break through this complexity. By convening and creating partnerships or joint ventures with non-medical insurers, technology platforms, and third-party administrators (TPAs), they can create a true health-wealth solution — one that helps employers and employees make holistic benefit decisions and fund them to manage and mitigate risk, today and in the future.
Is it a moonshot? The products and tools are all there. New employee apps focused on financial wellbeing and subscription models funded through lifestyle spending accounts (LSAs) offer a wide range of voluntary benefits, but no one has yet figured out how to package them all together. Health plans are uniquely positioned as the anchor product that can lead the way to holistic benefit solutions that work, ones that are tailored to employee segments at various life stages and help those employees understand how to fund, navigate and pay for those benefits — and maybe even save some money for retirement along the way.
Confusion reigns over employee options
Healthcare costs are expected to rise again in 2026. Most workers covered by employer-sponsored health plans will see paycheck deductions increase by 6% to 7%, according to Mercer’s National Survey of Employer-Sponsored Health Plans. That’s on top of higher deductibles, copays, and out-of-pocket spending — with 55% of employers planning cost-cutting changes to their plans in 2026.
Even when multiple coverage options are available, employees often find little discernible difference between them. Some employers are turning to platforms that allow employees to build their own health benefits package, but this can heighten anxiety and confusion due to limited transparency and consumer understanding around provider quality and costs.
Adding to the confusion are the number of additional benefits employees have to choose from. While these options can appear on the same platform during open enrollment, they are often disconnected from core health coverage. Employees are left wondering how long-term care, life insurance, or accident policies fit with their medical plan choices.
Employees also struggle to understand and optimize financial tools such as health savings accounts (HSAs) and flexible spending accounts (FSAs). On top of all this, they do not understand how to fund and pay for their benefits, which impacts buying decisions: Should I buy supplemental medical? What about term life insurance? For how long? Can I pay for it and still afford my utility bill? The sheer array of funding options is overwhelming.
Coordinated benefits offerings hold promise
We’ve identified six tactics insurers can take to develop comprehensive, coordinated solutions that benefit everyone:
1. Gain deeper insights into the workforce: Understand an employer’s unique employee population across such dimensions as life stage, health and financial priorities, and funding challenges. Then segment employees into key groups and personas that can be effectively served with consistent, tailored benefits and experiences.
2. Tailor coordinated benefit packages: Design a limited number of packages that meet the needs of employees at each life stage. Effective package design begins with sound segmentation using data to create meaningful distinctions without overwhelming employees or health plan teams with excessive options. Agentic artificial intelligence tools using claims and clinical data can help plans and their partners develop holistic packages and funding solutions that are relevant and resonate with employees.
3. Embrace human-centered design: Build intuitive experiences that help employees share their priorities, find the right package, and stay engaged. This is not about making benefit selection just like buying a car or a mobile phone. Healthcare — and all benefits — are different and require tailored education and engagement strategies to give employees confidence in their selections. Well executed design and engagement at the point of selection can transform the experience for millions.
4. Integrate funding and savings guidance: Using insights from above, work with partners and vendors to create platforms that help employees understand how to pay and save for healthcare and other needs according to their life stage. A young couple with a newborn has very different priorities than an older worker on the path to retirement. The goal is to guide employees to the best option for their life stage and steer them toward the right funding and spending levers.
5. Establish the right partnership strategy: Using the health benefit as the core chassis, insurers can assemble comprehensive solutions by integrating other insurance and voluntary product providers through partnerships, joint ventures, and other go-to-market alliances. They can also shape the platform — whether built in-house or with a Fin or ben-tech or TPA partner — and help consumers manage the funding strategy, including tools like digital wallets. Importantly, once health plans convene and form these go to market alliances, they need to work with and market to brokers and benefits consultants to map solution sets to their employer client archetypes
6. Align with the employer’s overall benefits strategy: The portfolio and selection process should connect seamlessly with employers’ broader goals — improving experience and outcomes, promoting prevention, lowering cost trends, and helping employees save for the future. Coordinated, life-stage-based solutions should fit hand-in glove with these objectives.
Bridging the gap for employers and employees
Employers and employees need partners who deliver measurable outcomes. Health plans that step forward now can own the employer relationship and own this space. By leveraging their reach into all segments of the benefits market, insurers can act as the conductor to transform open enrollment from a season of stress into a moment that builds trust, engagement, and long-term loyalty.