Benefits utilization rate measures what share of eligible employees used a benefit during a given period. It's the easiest number to report during renewal season, but a high rate doesn't confirm the benefit actually changed anything for the person who used it.

Should the goal be higher utilization?

"62% used the benefit" sounds like a result. It's really just the start of the question that matters: what did that 62% do, did they come back, and did anything change afterward?

That's how utilization, on its own, turns into a vanity metric: it's one of the easiest numbers to move, the one that looks best on a dashboard, and the one that can end up justifying a renewal with a simple argument, people are using it, so keep it. The problem shows up the moment someone asks what impact that use actually created.

That question matters more this year than last. WTW found that 90% of U.S. employers named rising benefit costs as a top factor shaping their 2025 strategy, up from 67% in 2023 (WTW, 2025 ). Mercer projects health cost per employee will rise 6.7% in 2026, after a 6% increase in 2025, the steepest climb in 15 years (Mercer, 2025 ). KFF put the average family premium at $26,993 in 2025, up 6% from the year before (KFF, 2025). Against that backdrop, the goal isn't spending less, and it isn't generating more usage for its own sake. It's knowing which utilization is worth improving.

Two employees can look identical in a utilization report even though the value created is completely different.

That's the gap: utilization captures the visible action, not what happened next. It works better paired with other questions:

MetLife found that employees who understand and are satisfied with their benefits are 1.4 times more likely to feel engaged and 1.2 times more likely to feel productive (MetLife, 2025). Todd Katz, head of Group Benefits at MetLife, said "we're at a critical moment where employers have the chance to do more than just lift morale, they can drive real impact. SHRM found a similar signal from the other side: in 2025, 84% of employees said they felt well informed about their benefits, up from 77% in 2024 (SHRM, 2025), which suggests communication does move the needle, even when it never shows up in a utilization report.

These metrics complete utilization. Utilization stops being the end-of-quarter conclusion and becomes one input in a larger diagnosis.

Is better utilization the same as higher utilization?

No, but it isn't lower utilization either. The goal is better utilization: the right benefit reaching the right person, at the right moment, moving something after that interaction.

A preventive screening used by someone with type 2 diabetes risk factors can be better utilization if it enables earlier action. The same screening used by someone who already got it every year, with no change in behavior, still counts as "used" in the report, but the benefit's added effect is much smaller. To the vanity metric, both cases look the same. To a better-utilization strategy, they don't.

Utilization still belongs in the conversation because use has real cost consequences. 36% of large firms said prescription drug prices contributed "a great deal" to their premium increase (KFF, 2025).

• Old metric —> Did utilization go up?
• New metric —> Did the right utilization go up?

Defining "right" forces a decision before the benefit launches: more prevention, better attendance, a healthy habit, or steering use toward the options that create more value.

The goal is knowing which utilization is worth improving.

That is also the limitation of reading utilization in isolation. Research on how U.S. employers evaluate health plan performance has found much heavier use of financial measures than employee-experience measures. The implication is simple: the metrics that are easiest to quantify can dominate the dashboard without fully explaining whether the benefit created value. (JAMA Health Forum, 2025).

This is what turns utilization into a diagnosis instead of a scoreboard: know which number is worth improving, then check it against recurrence, timing, behavior change, or the outcome the benefit was designed to influence.

What does better benefits utilization look like in practice?

Intelligent utilization connects three things: who used the benefit, why they used it, and what changed afterward. That context is what separates a generic interaction from a relevant one.

Sending the same wellbeing message to the whole company can generate clicks. Noticing that one person is dealing with a specific need and offering the relevant benefit at that moment creates something different, an action that probably wouldn't have happened on its own.

Betterfly measures utilization the way this article argues for. Every employee gets two lab panels a year, Buddy explains the benefits they already have, and each action they take earns Betterflies. Employers see the result in a monthly Health Insight Report that shows adoption, comprehension, action, and engagement, in aggregate and de-identified, rather than a single usage percentage. That is a better way to benefit. (Betterfly, 2024).

Betterfly does not replace the health plan and does not report on individual employees. It sits on top of the coverage a company already offers, and employers only ever see aggregate, de-identified data.

A better benefits utilization rate starts with deciding which behavior matters before measuring the percentage. Employers can then track whether the right employees reached the right benefit, returned when it was useful, and took the next action the program was designed to encourage.

With that, utilization becomes something the employer can act on, not just report.

See what better utilization looks like before your next renewal conversation. Learn more about Betterfly.

Sources:

1. WTW — Employer Benefit Strategy Shifts Amid Rising Costs (https://www.wtwco.com/en-us/news/2025/06/amid-cost-pressures-us-employers-are-shifting-their-benefit-strategy-wtw-survey-finds (https://www.wtwco.com/en-us/news/2025/06/amid-cost-pressures-us-employers-are-shifting-their-benefit-strategy-wtw-survey-finds)
   

2. U.S. Bureau of Labor Statistics — Employer Compensation and Benefits Costs (https://www.bls.gov/news.release/ecec.nr0.htm (https://www.bls.gov/news.release/ecec.nr0.htm)

3. Mercer — Projected Increase in Employer Health Benefit Costs for 2026 (https://www.mercer.com/en-us/about/newsroom/employers-are-bracing-for-the-highest-health-benefit-cost-increase-in-15-years/ (https://www.mercer.com/en-us/about/newsroom/employers-are-bracing-for-the-highest-health-benefit-cost-increase-in-15-years/))

4. KFF — Employer-Sponsored Health Insurance Costs and Coverage Trends (https://www.kff.org/health-costs/2025-employer-health-benefits-survey/ (https://www.kff.org/health-costs/2025-employer-health-benefits-survey/)

5. MetLife — Employee Workplace Engagement and Benefits Satisfaction (https://www.metlife.com/about-us/newsroom/2025/september/new-metlife-data-finds-half-of-employees-report-feeling-disconnected-undervalued-at-work/ (https://www.metlife.com/about-us/newsroom/2025/september/new-metlife-data-finds-half-of-employees-report-feeling-disconnected-undervalued-at-work/)

6. SHRM — Employee Benefits Satisfaction and Workplace Expectations (https://www.shrm.org/topics-tools/news/benefits-compensation/employee-satisfaction-with-benefits-drops (https://www.shrm.org/topics-tools/news/benefits-compensation/employee-satisfaction-with-benefits-drops)

7. JAMA Health Forum — Research on Employer Health Benefits and Healthcare Costs (https://jamanetwork.com/journals/jama-health-forum/fullarticle/2829645#google_vignette (https://jamanetwork.com/journals/jama-health-forum/fullarticle/2829645#google_vignette)