Here’s a scene that plays out millions of times a year. An employee schedules their annual physical. They see their network doctor. Some blood work is ordered. Maybe a flu shot. Maybe a screening colonoscopy now that they’ve turned 45. They walk out the door assuming everything is covered at 100%, because that’s what their benefits guide says. That’s what the ACA requires. That’s what their employer told them at open enrollment.

Then the bill arrives.

Research published in Health Affairs and Preventive Medicine, based on analyses of commercial health plan claims, found that across seven different plan designs, anywhere from 21% to 61% of enrollees experienced cost sharing for services that should have been covered as preventive care—including flu vaccines, mammography, colonoscopies, and annual wellness visits. In employer-sponsored plans specifically, one in four individuals was estimated to be at risk of receiving a bill for what they reasonably believed was a free benefit.

For benefits leaders, this isn’t just a billing problem. It’s a trust problem. And it has cascading effects on the very engagement and outcomes your preventive program depends on.

The Size of the Problem

The dollar amounts are not trivial. When employees did incur out-of-pocket costs for preventive services, the charges ranged from $60 to $96 for annual wellness exams and $329 to $941 for colonoscopies. Even lower-cost services like flu vaccines and routine lab work generated charges of $21 to $26—small individually, but meaningful to employees already under financial pressure.

To put the aggregate scale in perspective, researchers estimated that $75 million to $219 million in cost sharing for preventive services was inappropriately borne by commercial plan members. These weren’t charges for elective procedures or out-of-network visits. They were charges for services the ACA was specifically designed to make free.

And the burden isn’t distributed equally. The research found these unexpected costs were more likely to be incurred by women and in connection with screenings for diabetes and high cholesterol—two of the most important chronic condition areas for employer health strategies. The people employers most need to engage in preventive care are disproportionately the ones getting hit with surprise bills for doing exactly that.

[GRAPHIC: Data visualization showing the range of out-of-pocket costs by service type. Three tiers: Flu vaccines/lab work ($21–$26), Annual wellness exams ($60–$96), Colonoscopies ($329–$941). Include callout: “1 in 4 employees in employer-sponsored plans at risk of receiving a bill for preventive care.” EHE branded.]

Why Employees Get Billed for “Free” Care

The root cause is a distinction that almost no employee understands—and that many benefits leaders haven’t fully reckoned with. Health plans differentiate between “screening” and “surveillance.” Screening means detecting conditions early in people who aren’t known to have disease. Surveillance means monitoring patients who already have known risks, previous findings, or family history.

Under the ACA, screening services must be covered at 100% with no cost sharing. But surveillance—even when it looks identical to the patient and involves the same procedure in the same facility—can be subject to deductibles, copays, and coinsurance. Whether your employee’s colonoscopy is “free” or costs $941 out of pocket may come down to how their doctor coded the visit and how their health plan’s claims payment policy interprets the diagnosis codes on the claim.

The complexity is staggering. One large national carrier’s published preventive care payment guidelines runs 49 pages. Another runs 31. These documents are written for claims processing specialists, not for benefits leaders, and certainly not for the employee sitting in the exam room. The result is a system where the promise of “free preventive care” depends on a byzantine set of coding and billing rules that no one involved in the actual care delivery—not the patient, often not even the physician—fully understands.

[GRAPHIC: Side-by-side comparison. Left column: “What your employee experiences”—annual physical, blood work, colonoscopy, flu shot. Right column: “What the claims system sees”—screening codes vs. surveillance codes, and how the same visit can generate 100% coverage or a $941 bill depending on clinical history and coding. Visual should make the absurdity tangible.]

The Trust Tax on Your Benefits Program

The downstream consequences of benefit abrasion extend far beyond the individual billing dispute. When an employee gets a surprise bill for a preventive visit they were told would be free, several things happen at once. Their trust in the benefits program erodes. Their willingness to schedule the next preventive visit decreases. And the story spreads—through the break room, through Slack channels, through the informal networks where employees actually form their opinions about whether the company’s health benefits are worth using.

This isn’t speculation. Commonwealth Fund survey data shows that 43% of adults with employer coverage already find it difficult to afford health care, and one in four people forgo or delay care because of cost concerns. When the preventive benefit itself generates unexpected costs, it compounds an affordability problem that is already causing people to disengage from the healthcare system.

Consider the perverse incentive this creates. The people with the highest clinical risk—those with previous findings, family history, or early-stage chronic conditions—are the ones most likely to have their preventive services reclassified from screening to surveillance. They’re the ones most likely to receive a bill. And they’re the ones whose disengagement from preventive care is most costly to the employer in the long run, because their conditions will escalate to expensive acute episodes if left unmanaged.

As one reporting outlet put it, the people most likely to develop colorectal cancer are also the most likely to be stuck with the bill for trying to prevent it. That isn’t just an insurance billing quirk. It’s a structural failure in how the preventive benefit is administered.

[GRAPHIC: Circular diagram showing the “disengagement cycle.” Employee told care is free → Gets surprise bill → Trust erodes → Skips next preventive visit → Condition goes undetected or unmanaged → Escalates to costly acute episode → Employer costs rise. The cycle should visually reinforce that benefit abrasion undermines the entire preventive strategy.]

What Employers Can Do About It

Self-insured employers theoretically have the ability to work with their third-party administrators to reduce benefit abrasion. In practice, the claims payment policies that create these problems are deeply embedded in carrier systems and extraordinarily difficult to override. The rules are too complex, the coding distinctions too technical, and the volume of claims too large for even the most sophisticated benefits team to police effectively.

The problem is compounded by provider billing practices. In some documented cases, providers have billed separately for incidental charges—like surgical trays during a colonoscopy—that create out-of-pocket costs for the patient even when the procedure itself is covered at 100%. These situations require persistence from employees to resolve, and the reality is that most people simply pay the bill rather than fight through the appeals process.

The alternative is a program design that eliminates the screening-versus-surveillance distinction entirely. When preventive care is delivered through a dedicated program with bundled pricing that covers all preventive services at 100%—regardless of the patient’s clinical history or risk profile—the billing confusion disappears. The employee experience is simple: if the service is preventive, it’s covered. No coding games. No surprise bills. No 49-page claims payment manuals to decode.

That kind of simplicity isn’t just better for the employee. It’s better for the employer, because it removes the single biggest barrier to engagement: the fear that “free” preventive care might not actually be free.

The Question for Benefits Leaders

If you’re a benefits leader at a large employer, there’s a question worth asking that most organizations never think to ask: How many of your employees received a bill for preventive services last year? And of those, how many decided not to come back?

The ACA promised free preventive care. The reality is that the complexity of claims payment policies has turned that promise into a gamble for millions of working Americans. The employers who recognize this gap—and take steps to close it—will see the engagement, the outcomes, and the cost savings that preventive care is supposed to deliver. The ones who don’t will keep wondering why their employees aren’t using the benefit they were told was free.

For a deeper look at the research behind 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%?