Why Employees Stick With the Wrong Health Plan (and What We Can Do About It)

Every open enrollment season, I see the same thing happen.

Employees stare at their benefit options, feel overwhelmed, and ultimately choose the plan they already have—not because it’s the best choice, but because it’s familiar. Nothing terrible happened last year, and benefits are VERY confusing. So they re-enroll and move on.

That isn’t apathy. That’s decision fatigue.

We ask people to make one of the most personal, high‑stakes financial decisions of their year by processing language they don’t understand. When we don’t understand something (do you really know the difference between a copay and coinsurance) we tend to shut down. The stakes may be high, but engagement is low. 

Most of us know what words like HMO and PPO mean at a surface level, but when you get into networks, out‑of‑pocket costs, coinsurance, and deductibles, confidence drops fast. Add in fear of the unknown—Will I have to change doctors? What happens if something goes wrong?—and that confusion can trigger a fight-or-flight, or even a freeze response. When that happens, people often default to the familiar, which feels safe.

This rinse and repeat benefits election cycle comes with a cost. A great example is a high‑deductible health plan (HDHP). If you don’t fully understand your current plan, “high deductible” just sounds like more risk and more money out of your pocket. And if I’m an employee who’s already tired and unsure, that’s an easy no.

But here’s what I’ve learned: the problem isn’t the plan. It’s the lack of education before the choice.

In the example of an HDHP, when employees understand how one actually works—what the network looks like, what the out‑of‑pocket max really means, and how a health savings account (HSA) can help offset costs—the fear starts to fade.

Both an HDHP and an HSA stop being abstract concepts and become tangible. When employees understand how their contributions (and in some instances, an employer contribution) to an HSA help offset the higher deductible, it changes the conversation entirely, reinforcing that healthcare safety net and helping employees feel supported.

This applies to benefits as a whole. When employers take the time to help their employees really understand their benefits, not just during open enrollment, but all year long, they feel seen and they are able to grasp the tangible value of their benefits as part of their total compensation.

That feeling matters more than we sometimes realize. When we use our benefits, the decisions we are making are often emotional. Healthcare affects our families, our parents, our kids, and our future. What if someone has an emergency or needs surgery? There are real lives on the line. When people feel educated and supported, they don’t just make better decisions—they engage more deeply with the benefits you’ve invested in for them.

I always say this: employees don’t need more options. They need more clarity.

When we break benefits down into simple, human language—what this means for you, why it matters, and how it fits into your life—we lower the barrier to entry. And once that barrier is gone, the data shows people actually like these plans. They use them. They understand them. And they feel more confident navigating their health.

The more we educate, the less afraid people become. When bite size, actionable education is added in, and fear is removed from the equation, better benefits decisions can follow. This may mean lower healthcare costs and improved health outcomes. It’s a win-win!

FAQs

Q: Why do employees keep choosing the same health plan every open enrollment?

A: Most employees re-enroll in their existing plan not because it is the best fit, but because benefits decisions are overwhelming and the familiar feels safe. This is decision fatigue — when complex terminology, fear of the unknown, and high stakes combine, people default to what they already know rather than evaluating their options objectively.

Q: What is a high-deductible health plan (HDHP) and is it right for me?

A: An HDHP pairs a lower monthly premium with a higher deductible, but the out-of-pocket risk is often offset by pairing it with a health savings account (HSA). Employer and employee contributions to an HSA can help cover costs when care is needed, making an HDHP a financially smart choice for many employees — once they fully understand how the two work together.

Q: What is the difference between a copay, coinsurance, and a deductible?

A: A deductible is the amount you pay out of pocket before your insurance begins covering costs. A copay is a fixed dollar amount you pay for a specific service, like a doctor visit. Coinsurance is the percentage of costs you share with your insurer after your deductible is met. Understanding these three terms is foundational to choosing the right health plan during open enrollment.

Q: How can employers improve benefits engagement beyond open enrollment?

A: Year-round benefits education — delivered in plain, human language — helps employees move from confusion to confidence. When employers consistently communicate what each benefit means in practical terms, employees are more likely to use their benefits, make better healthcare decisions, and feel genuinely supported as part of their total compensation package.