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Why The Exodus of Healthy Younger Employees Matters at Renewal Time

By Michelle Kroll, Assistant Vice President, Marketing, Benecard Services

As benefit professionals we understand health care costs continue to increase.  But now it’s a top concern among plan participants, according to the latest KFF Health Tracking Poll, with nearly two‑thirds (64%) worried about affordability. These concerns are increasingly reflected among younger, healthier workers, many of whom are opting out of employer‑sponsored coverage in favor of lower‑cost alternatives.

A recent Bloomberg article highlights that employer‑sponsored health plan premiums have become increasingly unaffordable, particularly for younger workers, eroding take‑home pay. As a result, some are turning to cost‑sharing cooperatives or foregoing coverage altogether. This trend is not an anomaly: the Kaiser Family Foundation reports that average family premiums reached $26,993 in 2025, up 6% from 2024, with employees contributing $6,850 out of pocket.

Why You Should Pay Attention

There are two reasons why this exodus matters: the risk pool and the talent pool. Health plans depend on a balanced risk pool. Younger, healthier employees help keep claims and costs in check because they rarely use the benefit but contribute to funding the plan. When they leave, the pool is left with an older, higher‑utilizing population. Claims rise, premiums follow, and each year begins from a more costly baseline making renewal time more difficult. As for the talent pool, if you have high medical premiums, the ability to attract new young talent dwindles.

Actionable Steps to Be Proactive

  1. Review your actual plan participation.  A dwindling participation rate from younger employees is a hint your risk pool may be in trouble.  It’s time to dig deeper.
  2. Look at your health benefit.  Is it discouraging utilization and care with high deductibles? Talk to your medical carrier about alternative options.
  3. Review your pharmacy benefit programs. Savings are often overlooked in areas like medication failure, the largest avoidable cost in any health plan. When medications don’t work as intended, they frequently lead to unnecessary emergency room (ER) visits and inpatient stays. Benecard addresses this directly through personalized medication therapy for plan participants, combining clinical pharmacist support, pharmacogenomic (PGx) testing, and data science. The impact is typically seen on the medical side, with reduced ER visits and hospitalizations.
  4. Consider covering GLP-1 medications in your plan. To attract younger talent, think about offering GLP-1 coverage. A recent ZipHealth study found that nearly half of Gen Z (47%) said GLP-1 coverage would influence their choice between similar jobs, compared to 35% of millennials and 36% of Gen X. Additionally, 7% of respondents—and 9% of Gen Z—said they would accept a lower salary in exchange for this benefit. Meanwhile, 51% of the overall population in the study believed GLP-1 medication coverage should be a standard benefit.

Rising costs are no longer just a financial challenge—they are a workforce challenge. Employers that proactively evaluate plan participation, health benefit design, and pharmacy strategy will be better positioned to stabilize costs, protect their risk pool, and remain competitive in attracting and retaining talent. Affordability for the plan participant is no longer optional; it is essential.

To learn more, contact your Benecard Representative.

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