There’s a term gaining traction in benefits strategy conversations that every employer should understand: benefit abrasion. It describes what happens when the promise of a benefit—in this case, 100% coverage for preventive care—is eroded by the operational complexity of claims processing, coding distinctions, and payment policies that sit between the employee and the coverage they were promised.

Benefit abrasion is not a fringe problem. Research published in Health Affairs found that across seven plan designs, between 21% and 61% of enrollees experienced cost sharing for services classified as preventive. Researchers estimated that $75 million to $219 million in preventive care cost sharing was inappropriately shifted to commercial plan members. And the phenomenon is structurally embedded in how health plans operate—meaning it persists even when employers and carriers have the best intentions.

Understanding why this happens—and who it affects most—is essential for any employer whose healthcare strategy depends on preventive care engagement.

The Screening-Surveillance Trap

The mechanics of benefit abrasion begin with a clinical distinction that has been weaponized by claims payment systems. Under the ACA, preventive screening services must be covered at 100% with no cost sharing. But health plans draw a sharp line between screening and surveillance.

Screening is defined as detecting conditions early in people who are not known to have disease or who may be at risk. Surveillance is monitoring patients who have known risks due to previous findings or family history. The medical procedure can be identical. The patient experience is identical. But the billing outcome can be radically different.

Consider a colonoscopy. For a 45-year-old with no family history and no previous findings, this is a screening—covered at 100%. For a 45-year-old whose parent had colorectal cancer, the same procedure in the same facility may be classified as surveillance and subject to the plan’s deductible and coinsurance provisions. The patient doesn’t know this distinction exists until weeks later, when a bill arrives for anywhere from $329 to $941—or, in extreme documented cases, up to $12,000.

The paradox is sharp: the patients with the highest risk of developing colorectal cancer are the ones most likely to pay out of pocket for trying to prevent it. And this dynamic extends well beyond colonoscopies. Diabetes screenings, cholesterol panels, and other services tied to chronic condition management all carry similar exposure depending on how the patient’s history is coded.

Why This Can’t Be Fixed With a Memo to Your TPA

Self-insured employers technically have the authority to instruct their third-party administrators to cover all preventive services at 100%, regardless of how they’re coded. In practice, this is far more difficult than it sounds.

The claims payment policies that distinguish screening from surveillance are deeply embedded in carrier systems. These aren’t simple toggles. They’re multi-layered sets of rules tied to diagnosis codes, procedure codes, patient demographics, and clinical history. One national carrier’s preventive care guidelines run 49 pages. Another runs 31. Both are updated regularly. Asking a TPA to override these policies across the board requires a level of technical specificity and ongoing oversight that exceeds what most benefits teams are equipped to manage.

Meanwhile, provider billing practices add another layer of complexity. In one documented case, a couple each had colonoscopies that were correctly covered as preventive care with no patient cost—but the provider separately billed $600 for surgical trays used during the procedures. The colonoscopy was free; the tray it sat on was not. It took persistence and multiple phone calls to resolve, and most employees would simply have paid the bill.

The net effect is a system where even well-intentioned employers can’t guarantee that “100% preventive coverage” means what their employees think it means. The gap between benefit design and benefit delivery is real, and it’s filled with claims payment complexity that works against the goal of getting people engaged in preventive care.

The Strategic Cost of Benefit Abrasion

Benefit abrasion doesn’t just create individual billing disputes. It systematically undermines the ROI of an employer’s entire preventive care investment.

The economic logic of prevention is straightforward: engage employees in primary and preventive care early, catch conditions before they become expensive, and avoid the downstream costs of emergency room visits, inpatient admissions, and late-stage disease management. But this logic depends on engagement. And engagement depends on trust—specifically, the employee’s trust that the benefit will work as promised.

When that trust is broken by a surprise bill, the damage extends beyond the individual. Healthcare affordability is already a top concern for working-age Americans. Commonwealth Fund data shows 43% of those with employer coverage struggle to afford care, and one in four people delay or forgo care because of cost. Benefit abrasion adds preventive care to the list of services that employees approach with financial anxiety—which is exactly the opposite of what the ACA was designed to achieve.

For the benefits leader building a business case for preventive care, this creates a measurement problem as well. If a meaningful percentage of your eligible population is disengaging from prevention because of unexpected cost exposure, your program’s participation rates, screening completion rates, and cost-of-care comparisons are all compromised. You’re measuring the impact of a benefit that isn’t being delivered as designed.

What a Clean Solution Looks Like

The most effective way to eliminate benefit abrasion is to remove the conditions that create it. That means a preventive care model where the screening-versus-surveillance distinction doesn’t exist at the benefit level—where every preventive service is covered at 100% regardless of the patient’s clinical history, risk factors, or how the visit is coded.

This is how EHE Health’s preventive benefit program is structured. Members receive comprehensive preventive care—including all screenings, labs, and follow-up services—at 100% in-network coverage, whether the care is delivered in a single visit or across multiple visits over the year. There is no need to differentiate between screening and surveillance, because the pricing model doesn’t depend on that distinction. The bundled approach also protects employers from the dramatic cost variation that characterizes fee-for-service preventive care billing, where the same colonoscopy might generate a $200 charge at one facility and a $5,000 charge at another.

For the employee, the experience is simple: if it’s preventive, it’s covered. For the employer, the benefit of this simplicity goes beyond member satisfaction. It means higher engagement, better screening completion rates, earlier detection, and a preventive strategy that actually delivers on the cost reduction it’s supposed to achieve.

Pre-Existing Conditions Have Found a New Home

The ACA eliminated pre-existing condition limitations that once blocked access to health insurance. But as the benefit abrasion research reveals, pre-existing conditions haven’t disappeared from the healthcare system—they’ve migrated into the preventive benefit. The same clinical history that once prevented someone from getting coverage now determines whether their preventive care is free or costs hundreds of dollars out of pocket.

For employers who have made preventive care a pillar of their healthcare strategy, this is a structural problem that demands a structural solution. Incremental fixes—talking to your TPA, auditing claims, educating employees about the screening-surveillance distinction—address symptoms without solving the underlying issue. The employers who will see the full return on their preventive care investment are the ones who adopt benefit models that eliminate the abrasion entirely.

For the complete analysis of preventive benefit abrasion and how employers can ensure true 100% coverage, download the full white paper: Is Your Preventive Benefit Really Covering People at 100%?