What Gen Z wants from benefits enrollment

I recently spoke with a young employee who dreaded benefits enrollment season throughout her early career. She shared that the combination of the high cost of health insurance and confusion about what plans actually covered made the process so overwhelming that she defaulted to the simplest option without giving it much thought. She’s not alone — 30 percent of Gen Z workers ¹ don’t enroll in employee-paid benefits because they simply don’t understand them, creating unnecessary gaps in protection during some of the most financially vulnerable years of their lives.

On top of awareness gaps and lack of understanding, cost remains a significant hurdle, especially for younger employees with tight budgets. Among Gen Z, those who are carrying student debt (65%), single parents (72%), women (55%), or have experienced a recent health event (55%), have major concerns about affordability ¹.

According to the Education Data Initiative, Gen Z carries an average student loan balance of $22,948, making every dollar of monthly spending count. That financial pressure often leads to benefits trade-offs, especially if the value of a given benefit isn’t immediately obvious.

Clearly explaining what each benefit covers, what it costs, and how it can provide financial protection in everyday situations will help younger employees assess what fits their financial situation now, and what value may be provided down the road.

Personalization matters in education and communication

Tailored communication strategies: There’s good news for benefits professionals: Gen Z wants to engage. The majority (83%) of Gen Z workers want extensive or substantial information during open enrollment ¹, showing more interest than Gen X (72%) or Millennials (75%). 

Eighty five percent of Gen Z workers surveyed by Principal say they want to see what “people like them” choose when it comes to benefits enrollment ¹. Peer-based examples go a long way in making benefits feel more tangible for all employees. Specifically, employees are looking for tailored recommendations for people in their age group, with a similar salary, in the same life stage, and in the same career stage.

For Gen Z, this could look like a story about someone of a similar age and income demographic who used accident insurance for a sports injury or someone who relied on short-term disability coverage after surgery. Of course, each individual’s needs are unique and employees should consult with the appropriate professionals to determine what is in their best interest.

Who is the best resource to guide them through these choices? For three consecutive years, our Global Financial Inclusion Index has found that U.S. consumers view their employers as doing the most to support their financial inclusion. That trust gives employers a unique opportunity to take the lead in communicating the real value behind employee benefits, and help their younger workers build the foundations of a more sound financial future. In turn, this strengthens employee trust and loyalty, supporting long-term retention.

Timing and channels: We know that Gen Z prefers to learn using digital-first approaches, social media platforms, and peer comparison data. Three in four employees across demographic groups are becoming more comfortable with mobile enrollment, and half of employees would likely use a personalized AI-powered benefit assistant during their enrollment ¹. Digital-first solutions, combined with trusted human interaction, will be essential to engaging this tech-native generation, especially as they are an increasing percentage of the workforce.

Additionally, employees prefer to receive information about their benefits one to two months before open enrollment ¹. This gives benefits advisors and employers a clear window to start outreach early and deliver information when it’s most likely to be absorbed.

With that in mind, here are some strategies to more effectively connect with Gen Z throughout the enrollment process:

• Start outreach early. Most employees prefer to receive information about their benefits before it’s time to enroll.
• Offer mobile-first platforms that allow for quick access and comparison.
• Tailor communications to different life and career stages.
• Make a plan for ongoing education, not just a once-a-year enrollment push.

With Gen Z projected to represent 30% of the U.S. workforce by 2030, it’s imperative that organizations adapt to attract, retain and empower this digitally-native generation. They want to know how a benefit applies to their real life, how much it costs, and why it matters — without having to decode complex HR language or review multiple (sometimes lengthy) documents.

As enrollment season approaches, employers and benefits professionals have an opportunity to meet Gen Z where they are. By delivering timely and relevant education, mobile-friendly tools, and peer-informed communication, we can help this generation make confident, informed choices that support their wellbeing now and in the future.

¹ 2025 Principal® Employee Life Stage Benefits and Utilization survey conducted among 1,000 U.S. employees of small and midsize businesses from April 23-30, 2025.