HDHP Enrollment Is Falling. Your Employees Are Telling You Something.

The Peak Is Behind You

HDHP enrollment hit its ceiling in 2021 and has been sliding ever since. According to WorldatWork, 60% of workers with single coverage and 58% with family coverage were enrolled in an HDHP that year. By 2023, those numbers had slipped to 55% and 56%.

Small drops. But the direction matters. The GAO's 2025 report on HSA features and account holder characteristics confirms the same trend. HDHP participation is down, year over year, from 2019 through 2023.

This isn't noise. It's a signal. If you've been defaulting to HDHPs as your primary plan, your employees are quietly voting with their plan elections.

Why Employees Are Walking Away

The original HDHP promise was clean. Lower premiums, tax-advantaged savings, more skin in the game. What actually happened is messier.

WorldatWork flagged workers struggling to manage higher deductibles as a key driver of the post-2021 decline. When wages are tight, a $1,650 individual deductible (the 2025 IRS minimum for self-only HDHP coverage) isn't a savings vehicle. It's a barrier.

The satisfaction data is worse. A NISB Benefits consumer satisfaction survey found HDHP enrollees were less satisfied with their plan choices at open enrollment than traditional plan participants. This held even though HDHP enrollees were more likely to have three or more plans available, 29% versus 17%. More choices. Less confidence.

They also spent more time on enrollment decisions than traditional enrollees, despite most people spending under an hour total. That's not someone who feels empowered. That's someone who's confused and frustrated.

What the Research Now Says

I laid out my full position in a recent DSP whitepaper, Illinois, HSAs, and a Broken Healthcare System. The short version: HDHPs work for a narrow slice of the population. High earners, healthy individuals, financially literate savers. For everyone else, the math doesn't work. And the 2024 and 2025 research backs that up.

A 2025 JAMA Network Open cohort study of 343,137 adults found HDHP enrollment was associated with significantly lower use of evidence-based clinic, laboratory, and prescription drug care for patients with chronic illnesses. The authors concluded HDHPs "may not be an appropriate insurance mechanism for individuals with chronic illness."

A 2024 Journal of Clinical Oncology analysis found HDHPs were associated with worse overall and cancer-specific survival among cancer survivors. For people without a cancer history, the effect wasn't observed. Translation? HDHPs specifically harm the people who need ongoing care the most.

A 2024 PMC/NIH study on mental health and substance use disorder treatment found a 7.7% reduction in ambulatory mental health services and a 4.3% reduction in SUD medication treatment among HDHP enrollees. Post-pandemic, that's the opposite direction we want to be moving.

That's the pattern. HDHPs don't reduce waste. They reduce care. And the cost gets paid later, at higher acuity.

The HSA Problem Nobody Wants to Admit

The HDHP only works if the HSA works. The HSA only works if money goes into it.

According to an AMA and CMS report, 55% of employers offering HSA-eligible HDHPs don't contribute anything to their employees' HSAs. Not a match. Not a seed contribution. Nothing. The same research found employees are meaningfully more likely to fund their own HSA when employers provide a match. Remove the match and the incentive collapses.

State-level data confirms the pattern. The Georgetown SEHP Cost Containment Report found that in states where the employer didn't contribute to an HSA, HDHP take-up stayed low. Twenty of 30 states offering HDHP options had fewer than 10% employee enrollment in those plans.

And the people the HSA is supposed to help? Research from the Center on Budget and Policy Priorities found HSAs deliver the largest tax breaks to high earners while providing "far less financial benefit to people with low or moderate incomes." An HSA is a powerful tool if you can afford not to use it. For the family that needs it most, it's an empty promise.

Pairing a $5,000-deductible HDHP with a $1,000 employer HSA seed and calling it a "consumer-driven strategy" isn't strategy. It's cost-shifting with a tax wrapper.

What's Actually Changing

Not everything points down. The Benefitfocus 2025 State of Employee Benefits Report found Gen Z workers had the highest HSA-eligible HDHP participation of any generation. Younger workers, fewer health costs, longer savings horizons. The structure still makes sense for them. But you can't build an entire plan strategy around one cohort.

On the regulatory side, there's a real development worth tracking. RSM US covers IRS Notice 2026-5, which reflects the One Big Beautiful Bill Act's expansion of the HDHP definition. HDHPs can now cover certain drug classes and preventive health services before the deductible kicks in. That removes one of the sharpest employee complaints about HDHPs, paying full cost for maintenance medications before meeting the deductible. If you haven't revisited your plan documents since OBBBA passed, you're leaving a retention and satisfaction win on the table.

What This Means for Your Next Renewal

If your HDHP participation is flat or dropping, don't just blame employee financial literacy. Look at your design first. Are you funding the HSA, or just offering one? Is the deductible paired with a realistic out-of-pocket ceiling? Have you updated your plan documents to reflect the new pre-deductible coverage options under OBBBA?

The questions aren't complicated. The answers might be uncomfortable.

The HDHP isn't dead. But the stripped-down version, high deductible plus no employer HSA contribution plus no education, has run out of runway. Employees aren't confused about HDHPs. They've figured them out. And a lot of them don't like what they found.

The question isn't whether to keep offering an HDHP. It's whether yours is actually designed to work for the people enrolled in it.