Nayya's Report Exposes $3 Trillion Waste in Employer Benefits Spending

Nayya's Report Reveals $3 Trillion Waste in Employer Benefits Spending

In a groundbreaking report released today, Nayya, an AI-driven benefits optimization platform, unveils a sobering reality for human resources (HR) departments and corporate leaders: the staggering $3 trillion allocated annually for employee benefits is largely wasted due to systemic inefficiencies and misaligned incentives. This critical 2025 Benefits Value Gap Report highlights the urgent need for comprehensive reform in how employee benefits are managed and communicated.

The data provided in the report shows that only a mere one in ten employees truly understand the value of their benefits. Shockingly, 70% of those surveyed continue to choose the same benefits year after year, regardless of significant life changes such as new diagnoses or salary adjustments, which means they might be missing out on essential savings and protections. This disconnect transforms the benefits landscape into a confusing labyrinth for many, ultimately leaving employees financially vulnerable and the intended value of the benefits system severely undermined.

Sina Chehrazi, founder and CEO of Nayya, stated, "If employees can't use or understand their benefits, why offer them at all? It's not just about communication; it’s a systemic failure. Employers are pouring billions into plans that employees ignore, misuse, or don’t even realize exist. This necessitates a radical rethink of the system—starting with AI-native solutions that treat employees like consumers rather than just another file in a cabinet."

This disconnect is not just an administrative oversight; it’s essentially a financial crisis for both employers and employees. The report reveals that while companies invest over $3 trillion into benefits, approximately 74% of employees do not comprehend their worth, leading to billions of dollars in lost value annually. Additional pressures come from rising costs in prescription drugs—which are expected to inflate benefits costs by 9-11% this year—as well as disorganized pharmacy benefit management systems, complicating cost analysis and increasing expenses by as much as 30% through convoluted rebate arrangements.

Employers often find themselves needlessly overpaying for benefits and wrestling with administrative inefficiencies; they typically spend 70-90% more time dealing with errors that could have been avoided with a more streamlined system. The report also highlights that voluntary benefits, such as accident plans and hospital indemnities, are underutilized, with participation rates hovering below 30%. This pattern results in a silent financial drain, where employee salary deductions directly enrich benefit providers, leaving the employees themselves at a disadvantage.

Add to this the considerable administrative burden, with companies expending between $50 and $70 per employee for benefits enrollment and management each month. Lack of intelligent tools and clear communication channels perpetuates this waste.

Sarah Liebel, President and COO of Nayya, explains, "Offering benefits alone is no longer sufficient. The system has become overloaded and intentionally obscure. However, there is an opportunity to leverage intelligent guidance and personalized approaches to help benefits truly fulfill their purpose—enhancing decision-making among employees, alleviating financial pressures, and ultimately promoting healthier lifestyles. The aim is to transition from merely patching gaps to reconstructing the benefits framework from the ground up."

Nayya’s research echoes what employees have sensed for years: the current benefits architecture is failing to meet their needs. Workers across all income strata and life circumstances report feeling overwhelmed by complexity and often unsupported when they need help the most. The outcome is a staggering waste of financial resources and increased distress for both employees and employers, compounded by missed chances for improved employee engagement and loyalty.

Despite corporate investments averaging $16,501 per employee in health benefits, a troubling one in four employees believe their benefits are worth $1,000 or less. Furthermore, only a scant 10% accurately gauge the full value of their benefits. This glaring perception deficit spells billions of employer dollars going unnoticed and underleveraged.

Only 30% of employees actively modify their benefits each year, and of those, merely 14% explore new options. The result? Many find themselves trapped in outdated coverage that diminishes their potential tax savings and financial safeguard opportunities, simply because they lack the information needed to make informed decisions.

Nayya’s findings underline a critical tipping point; nearly half of employees struggle to explain essential concepts like Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs). Additionally, many do not even acknowledge benefits as a component of their compensation, reflecting a fundamental disconnection from the value employers intend to provide.

To rectify this broken system, employers must address how benefits are delivered, putting an emphasis on personalization, clarity, and support. Nayya aims to bridge this gap by offering data-driven, customized benefits experiences that promote understanding and boost utilization while minimizing waste. Having experienced over 1,000% user growth in just three years, Nayya is paving the way for a reimagined benefits experience that aligns with the actual needs of employees.

To read the complete 2025 Benefits Value Gap Report, visit Nayya's official site.

About Nayya

Founded in 2019, Nayya is dedicated to simplifying the connection between people and their most crucial information, guiding them towards optimal health and financial well-being. By harnessing the power of AI, Nayya’s platform transforms complex benefits into straightforward, ongoing interactions that resonate with users’ real-world challenges. Supporting diverse employers, Nayya aims to unlock enduring value by helping employees cultivate resilience in their lives. The company has garnered backing from prominent investors, including ICONIQ, Felicis Ventures, and Workday Ventures. Discover more at Nayya.com.