Insights
Five ways employees leave benefits money on the table
The benefits package is compensation. Most workers accept a fraction of it, and the shortfall compounds.
Employers routinely report that a third of the value of a benefits package goes unclaimed. This is not because the benefits are bad. It is because claiming them requires attention on a specific day, and the day passes.
1. Declining free money
An employer match on a retirement plan is compensation contingent on your participation. An employee who contributes below the match threshold is refusing part of their salary. The same logic applies to employer contributions to a health savings account, which are frequently conditioned on opening the account — and the account is frequently never opened.
2. Treating open enrollment as a formality
Most workers re-elect last year’s choices. Last year’s choices were made for last year’s circumstances, at last year’s premiums, under last year’s plan design. Deductibles change. Networks change. A high-deductible plan paired with a funded HSA may have become the better economic choice while you were not looking, or the reverse.
3. Misjudging the FSA election
The 2026 health FSA limit is $3,400, with up to $680 of carryover if the plan permits it — and many do not. Employees who elect the maximum reflexively forfeit the excess. Employees who elect nothing pay for predictable care with after-tax dollars. Neither is a decision; both are defaults. The correct election is the spending you are confident will happen.
4. Ignoring the benefits that aren’t insurance
Commuter benefits allow $340 a month for transit and a separate $340 for parking, pre-tax, and elections can usually be changed monthly. Employee assistance programs offer counselling sessions at no cost. Tuition assistance remains excludable up to $5,250. Lifestyle spending accounts fund fitness and wellbeing, though — unlike an FSA — reimbursements are taxable income, because the expenses are not medical care under the Code.
These are unglamorous benefits with immediate, calculable value. Utilization is chronically low.
5. Spending the HSA
The most valuable feature of a health savings account is the one most people never use: the balance need not be spent. Contributions are pre-tax, growth is untaxed, and qualified withdrawals are untaxed — a combination no retirement account matches. Employees who reimburse every prescription immediately convert a decades-long tax shelter into a debit card.
Those who can afford to pay small expenses out of pocket, invest the HSA balance, and retain the receipts may reimburse themselves years later, tax-free, with no deadline in the statute. After 65, non-medical withdrawals are taxed but not penalized, which makes the account a traditional IRA with better upside.
The common thread
Each of these is a decision made once a year, in a hurry, on a form. The remedy is to treat open enrollment as a financial planning exercise rather than an administrative one — an hour, with last year’s medical bills and this year’s plan documents on the table. The hourly rate on that hour is generally very good.
This article is general information, not individualized investment, legal, or tax advice. Sources referenced include the Internal Revenue Service, Department of Labor, Securities and Exchange Commission, and FINRA. Consult a qualified professional about your circumstances.
Educational only. This page is general information, not individualized investment, legal, or tax advice. Rules depend on your account type, transaction, tax year, and circumstances — consult a qualified professional.