Many employees may have access to workplace health and supplemental benefits but still lack the financial cushion needed to handle unexpected medical expenses, according to new research from the Employee Benefit Research Institute and Lincoln Financial.
The report, “Expanding the Benefits Horizon: Employee Understanding, Enrollment, and Financial Vulnerability,” found that 53% of employees who experienced a recent medical event paid at least $1,000 out of pocket. Yet only 28% said they were very prepared to handle an unexpected expense of that amount.
The research also found that 44% of employees had no money set aside for unexpected medical costs. Nearly half, or 47%, said they experienced at least moderate financial difficulty because of medical expenses, while 45% continued to experience financial difficulty related to past medical events.
For some workers, the financial consequences extended beyond their household budgets. Thirty-seven percent of employees reported having a medical bill sent to collections.
“Our findings suggest that many workers simply do not have the financial cushion to absorb today’s health care costs,” said Bridget Bearden, director of Member Growth and Partnerships at EBRI. “Medical expenses are not always isolated events. Many employees have little savings set aside to absorb these costs, and affordability concerns are causing some workers to delay needed care. As health care costs continue to rise, strengthening workers’ financial resilience will become increasingly important.”
The study also examined how well employees understand the benefits available through their workplaces. While 54% reported a high level of understanding of health insurance and 53% said the same about retirement benefits, understanding was lower for supplemental coverage. Forty percent reported a high level of understanding of critical illness insurance, while 35% reported a high level of understanding of hospital indemnity insurance.
The researchers found that plain-language explanations could increase employee interest in voluntary benefits. After reading brief descriptions of coverage, 83% expressed some or strong interest in dental insurance, 79% in vision insurance, 76% in critical illness insurance, 71% in accident insurance and 63% in hospital indemnity insurance.
Cost was another significant concern. More than half of employees reported delaying or avoiding medical care because of costs, including 26% who had postponed care within the previous year.
The study also found an association between reported burnout symptoms and financial hardship. Among employees reporting burnout symptoms, 54% experienced moderate to extreme financial difficulty related to medical events, compared with 3% of employees without reported burnout symptoms.
The findings are based on an online survey of 1,130 benefits-eligible employees ages 20 to 64 conducted in October 2025.
The report is the third installment of a three-part research program examining supplemental health, dental and vision benefits from the perspectives of employers, benefits brokers and employees.
To review a summary of the new research report, visit www.ebri.org/voluntary-benefits-employees.