What if the best health plan for Gen Z is the one they’re least likely to choose?
With open enrollment on the horizon, employees everywhere will soon be selecting their health benefits. And for younger workers, that often means defaulting to the plan they’ve heard the most about: the PPO. But that familiar choice might not be the smartest one.
According to Healthee’s 2025 Benefits Divide, our internal report analyzing real benefits decision-making, Gen Z employees between 18 and 29 years old are 90% less likely to choose a high-deductible health plan (HDHP) than workers aged 30 to 44. That’s a major missed opportunity, especially for a group that tends to use less healthcare overall.
In this blog, we’ll break down what HDHPs actually are, how they compare to PPOs, and why Gen Z might be overlooking a cost-effective option. We’ll also look at how employers can make these plans easier to understand with better tools, smarter plan education, and a more personalized enrollment experience.
HDHP insurance stands for high-deductible health plan. It’s a type of health coverage with lower monthly premiums and higher deductibles. These plans are growing in popularity, especially for employees who don’t use much medical care and want to save money each month.
Here’s what sets HDHP insurance apart:
For younger employees (like Gen Zs entering the workforce), HDHPs may offer the chance to pay less each month while still being insured against major or unexpected medical needs. The key is knowing how to use them effectively, which is where most employees need help.
When comparing HDHP vs PPO, it’s important to understand the key trade-offs between cost, flexibility, and usage. Both types of plans cover essential health benefits, but they work very differently.
Despite being the healthiest and youngest working generation, Gen Z is far less likely to take advantage of the financial benefits that come with HDHP insurance.
According to data from The Healthee Divide, Gen Z employees aged 18 to 29 were:
So why aren’t they choosing HDHPs?
The biggest reason may be a lack of education. Gen Z workers often don’t have the guidance or context they need to make informed decisions about their health benefits. Many might stick with PPOs not because they’ve compared plans and calculated potential costs, but because PPOs feel familiar.
The deductible and out-of-pocket structure of HDHPs could be confusing at first glance, especially without support from modern enrollment tools. This confusion leads to potentially overpaying for coverage that the generally healthy Gen Zer may not need and missing out on potential savings each year.
When employees choose PPO plans, employers pay the price, literally. Because PPOs come with higher premiums and broader network coverage, they require greater employer contributions. In contrast, HDHPs may offer a more cost-efficient alternative for both employees and employers.
HDHPs shift more of the cost-sharing to employees, which makes them especially beneficial when adopted by low utilizers like Gen Z. HDHPs typically have lower premiums for employers to pay because of the higher deductible. They also lower overall claim volume since employees pay their share for a longer part of the year until they meet the higher deductible. The result is a lower overall cost burden for the company without sacrificing meaningful coverage for employees.
At Healthee, we’ve seen clients achieve significant savings by increasing HDHP enrollment through smarter plan education. For example, a leading social media company used Healthee to drive a 20% increase in HDHP adoption, leading to substantial reductions in annual claims costs.
This is possible because Healthee’s platform actively guides employees toward the most cost-effective options during open enrollment. It doesn’t just explain plans, it helps employees understand how to use them. That leads to more price-conscious behavior, fewer unnecessary claims, and better outcomes for everyone.
When paired with an employer HSA contribution strategy, HDHPs still deliver strong value to employees while reducing total spend for the organization. It’s a win-win — and a strategic opportunity many employers are overlooking.
Gen Z doesn’t just expect better benefits. They expect a better way to choose them.
Traditional open enrollment experiences are full of jargon, outdated PDFs, and confusing portals that don’t work. That approach doesn’t match how younger employees navigate decisions. Gen Z is used to personalized, digital-first tools that guide them step by step. When they don’t get that experience, they’re more likely to make default or misinformed choices. While Gen Z might be leading the charge in this shift, let’s face it, nobody likes reading those lengthy blue SBC spreadsheets or navigating confusing portals anyway.
Healthee’s AI-powered assistant, Zoe, transforms open enrollment into a guided, intuitive process. Zoe helps employees:
Are you ready to drive cost savings through things like 20% increase in HDHP enrollment? After implementing Healthee’s platform, you can give your employees a smarter, more personalized way to choose their plans.
Gen Z (and people of all ages) don’t need more information. They need clarity, relevance, and tech that meets them where they are.
PPOs may feel like the safer choice, but for many Gen Z employees, they’re not the smartest one. HDHP insurance offers real opportunities for cost savings both for employees who rarely use care and for employers managing rising benefits expenses.
The problem isn’t the plan. It’s the experience. When younger employees are equipped with the right tools, clear guidance, and a modern open enrollment process, they make better decisions. And when employers steer those decisions with care and transparency, the entire organization benefits.
At Healthee, we’re helping close the gap. With Zoe, our AI-powered assistant, employees get personalized, step-by-step support to understand their coverage options and choose what fits best. The result is smarter plan selection, reduced spend, and better outcomes for everyone.
Disclaimer: This article is meant to serve as an educational piece about greater trends in the healthcare and benefits industry, discussing potential cost-saving opportunities for both employees and plan sponsors. However, plan selections during plan renewals and open enrollment should be made on an individual basis using advanced, personalized advice. Always consult with a trusted source familiar with your healthcare and financial needs, like Healthee’s open enrollment platform, before making final plan selections.
