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Less Than Half Enroll? Understanding Low Health Plan Participation in Medical Practices

It may seem counterintuitive, but many medical practices across the country are struggling with low employee participation in their health plans, sometimes with fewer than 50% of eligible employees enrolled. For an industry so invested in health, it raises an important question: Why aren’t more healthcare workers signing up for coverage?

The answer is layered. According to Stitch PEO benefits experts Ariana Mosquera and Brandon Trowel, a few key reasons are driving this trend. Most of which stem from a lack of strategic planning, inconsistent communication, and rising financial pressures.

Rising Costs & Perceived Value

One of the most straightforward barriers to enrollment is cost. “Premiums are getting more and more expensive,” says Ariana. “That alone can deter employees from participating, especially if they’re balancing other household expenses or comparing it to a partner’s plan.”

But cost alone isn’t the only factor; it’s also about value. “When I see that there’s such low utilization in a practice, I immediately wonder what the communication plan was,” says Brandon. “People don’t enroll in something they don’t understand or see value in.”

Employees may not be aware of what’s included in their benefits package—or how it supports their well-being beyond basic healthcare. Without clear, consistent messaging from their employer, a comprehensive health plan can end up feeling more like an afterthought than a valuable resource.

Poor Communication & Decision Fatigue

Health benefits are often introduced during a single enrollment window, leaving little room for real understanding or questions. And when employees are handed a long list of options with minimal guidance, decision fatigue sets in.

“Too often, benefits are treated like a checkbox instead of a strategic part of company culture,” Brandon explains. “When that happens, participation drops. And without regular feedback, how can an employer know what’s working and what’s not?”

Ariana adds: “It’s surprising considering the industry. You’d think medical practices would lead the way here, but many are facing the same challenges as any other small to mid-sized business.”

The Impact of Low Participation

Beyond employee well-being, low enrollment numbers have a financial impact. Many carriers require a minimum level of participation—often at least 50%—to maintain group coverage. If enrollment drops below that threshold, the plan could be terminated altogether.

“Employers may not realize that putting together a contribution strategy that’s not financially sustainable can actually hurt long-term,” Brandon says. “A thoughtful, conservative approach makes a real difference, especially when scaling a practice.”

What Can Be Done?

Brandon and Ariana recommend a proactive, education-first approach:

  • Benefit 1:1s with employees to walk through plan options
  • Multiple enrollment sessions to accommodate schedules and improve understanding
  • Town halls and quarterly info sessions to keep benefits top-of-mind
  • Regular employee surveys to gather feedback and improve offerings

“Without effective benefits communication, employees suffer in silence,” Brandon warns. “They may be struggling with health concerns, financial stress, or life changes—and not realize the support is already available to them.”

A Strategic Shift

Ultimately, improving health plan participation isn’t just about boosting numbers—it’s about creating a culture where benefits are viewed as part of the overall employee experience.

“We want to see our partners do well financially and take care of their people,” Ariana says. “The right partner, the right strategy, and the right communication can completely shift the narrative.”

 

To dive deeper into the data and recommendations shaping benefits strategies in 2025, download the full report at stitchpeo.com/2025-benefits-survey. You’ll gain insights from hundreds of independent healthcare leaders, explore key trends impacting enrollment and retention, and walk away with actionable ideas to strengthen your own benefits approach.

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