Gen Z is ahead of the game with their benefits — but falling behind financially

• Key Insight: Learn why Gen Z's digital fluency is reshaping benefits engagement and employer strategy.
• What's at Stake: Rising benefit costs and insufficient support threaten retention, productivity, and employer brand.
• Forward Look: Prepare for digital-first, default HSA strategies to become standard employer practice.
• Source: Bullets generated by AI with editorial review

Gen Z and millennials are proving to be the most benefit-savvy generation — but they're still struggling to understand how to use them to meet their money goals. 

A recent report from benefit solution platform HealthEquity report found that 53% of Gen Z and 62% of Millennials understand their benefits "very well" or "extremely well," compared with 47% of Gen X and Baby Boomers. While high engagement is positive, leaders should ensure young employees aren't just understanding their benefits, but are taking the right types of action to meet their financial needs.

"That level of engagement challenges the common assumption that younger employees are disengaged," says Gary Robinson, senior vice president of strategic partnerships at HealthEquity. "It shows they're paying attention and taking action." 

Read more: Generation Beta: First Americans to save for retirement at birth

Unlike some of their older colleagues, younger generations are dealing with higher healthcare costs and economic uncertainty, and have been from the very beginning of their careers, Robinson notes. Most of them have already experienced student debt, housing costs and healthcare expenses climb, so they're approaching benefits more strategically out of necessity.

Another defining factor to young workers' advantage is that given their age, it's also incredibly likely that they're more comfortable with digital tools and financial technology than their older counterparts. This makes them predisposed to understand innovative benefit delivery tools and platforms more quickly and efficiently. One example is HSAs, Robinson explains.   

"HSAs fit naturally into how Gen Z already manage their money which is through apps, mobile deposits and online platforms," he says. "When benefits are delivered through intuitive, digital first experiences, literacy is far more likely to translate into real action." 

Healthcare affordability remains a concern

Employees will need these tools to navigate economic pressures. In fact, 84% of Gen Z report economic concerns — the highest of any generation, according to HealthEquity. Primarily, young workers are concerned about the rapidly increasing healthcare cost, where prices are rising faster than wages. Employees are seeing a 6.5% predicted rise in total benefit costs per employee in 2026, the survey reveals, marking the steepest increase in 15 years. With lower salaries and less savings cushion, younger workers are feeling the effects more acutely than others.

Read more: As health costs rise, Americans put more money in HSAs

"It's crucial for employers to understand [that they're] doing the right things but they're doing them in an economic environment with far less margin for error," Robinson says. "Younger workers are facing simultaneous pressures that older generations didn't experience to the same degree early in their careers." 

Fifteen percent of young talent even said financial stress is affecting their workplace performance "a great deal," the survey found, which is double the rate reported by Gen X and Boomers. 

"Engagement alone isn't enough to offset the pressures they are facing," Robinson says. "They need better designed systems of support and employers have both an opportunity and a responsibility to respond in ways that are practical, sustained and measurable." 

Meeting Gen Z's financial needs

Robinson urges benefit leaders to prioritize year-round benefits education, since employees who understand their benefits experience less financial stress outside of open enrollment. Since many younger workers lack sufficient balances, leaders should also strengthen HSA contribution strategies like employer matching, front-loaded seed contributions or covering investment fees can significantly improve outcomes. Default enrollment in HSA plans can make saving easier, he says, and options like Health Payment Accounts help employees pay costs without putting off care.

Finally, continuing to meet younger workers with mobile-first, intuitive and easy-to-use digital experiences is no longer optional, Robinson stresses — it's essential.

Read more: The risky trend that's putting secure retirement in danger

"The stakes are high," Robinson says. "Employers who don't [address financial wellness] risk higher turnover, deferred care and a workforce that's distracted, stressed and always looking for better opportunities." 

The good news for leaders is that the challenge is entirely solvable, Robinson assures. By investing in approaches that combine education, financial support and modern digital experiences, they can create real stability for their workforce while remaining competitive in the market. 

"Employers who step up during this healthcare affordability crisis — who acknowledge the financial pressures their young employees face and respond with substantive support — will be remembered," Robinson says. "That builds loyalty, strengthens your employer brand, and positions you as a destination for top talent who have choices about where to work."