Enrollment in high deductible health plans (HDHPs) fell below 50% in 2023, marking the second consecutive year of decline, according to the most recent ValuePenguin study on HDHP enrollment.
The study’s findings show that 49.7% of private-sector employees were enrolled in HDHPs in 2023, down from 53.6% in 2022. ValuePenguin reported enrollment reached its highest at 55.7% in 2021. Prior to 2022 and 2023, HDHP enrollment had not dipped since 2013. This trend aligns with a report by WTW, which found that the number of employers offering only HDHPs has fallen by 33% since peaking in 2020.
The Rise in HDHP Enrollment
Historically, more employers have offered HDHPs over the last decade. According to the U.S. Bureau of Labor Statistics, 33% of workers in private industries had access to HDHPs in 2014. By 2023, this increased to 51%.
The rise in HDHP enrollment was primarily driven by employer cost-saving measures and incentives for employees. Many employers opted for HDHPs as a more affordable insurance offering, as these plans feature higher deductibles but lower monthly premiums than standard health plans. HDHPs also enable employees to contribute to a tax-exempt health savings account, which could be used for qualifying medical expenses and allow for tax-advantaged savings.
Why HDHP Enrollment Is Declining
The ValuePenguin report illustrates that HDHP enrollment has declined in recent years despite these plans’ features. In part, the report attributes this to the ongoing impact of the COVID-19 pandemic, which rattled Americans about being unprepared for medical emergencies. While HDHPs have lower premiums, they do have higher deductibles and more out-of-pocket costs compared to other plan options.
Furthermore, the report speculates that many employees under private health insurance previously had a broader selection of health plans, including preferred provider organizations and health maintenance organizations. Many workers now have a more limited plan selection.
Although this report demonstrates a broad decline in HDHP enrollment, certain employees, such as younger workers, are choosing to remain with HDHPs. A report from Benefitfocus found that in 2024, more Generation Z workers were choosing these plans compared to their older counterparts.
Employer Takeaways
As rising health care costs drive employers to seek cost-effective ways to offer health insurance, HDHPs remain a valuable option for many workers.
Employers can await further plan participation data sets, which will outline HDHP participation trends for the 2024 and 2025 plan years.
Employers should review their health plan offerings and continue to monitor trends to stay competitive. Contact us for more resources.
The content of this article is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2025 Zywave, Inc. All rights reserved.
