Summer is winding down, which can mean only one thing: benefits busy season is just ahead. With its approach come burning questions around employee benefit trends: What does talent want? How will inflation affect cost containment? And how should employers and advisers prepare?
In this article, we share an overview of emerging employee benefit trends projected to shape 2024, and how employers can deliver to attract and retain talent while also balancing health plan costs. Let’s dive in and get ahead of busy season this year with a check in on employee benefit trends.
Market forces and employee benefit trends
It’s no secret for HR leaders and benefits advisers: there is still a lot at play in the market late in 2023. As in many other sectors, inflation is driving expected cost increases. In fact, according to insights from Mercer,1 primary health plan costs may jump as much as 5.6% per employee in 2024 as a result of inflation-driven price increases. This expected increase nearly doubles the typical year-over-year cost increase of 3%.
While many employers are understandably highly focused on cost containment, it’s important to strike the right balance. Benefits continue to matter—a great deal—for attracting and retaining talent. Employees are savvy enough to know the difference between “filler” benefits and those that deliver true value. Research reveals that nearly two-thirds of companies are planning to make benefit enhancements for 2024.2 Another 28% of firms surveyed are not planning to enhance benefits, but only because they did so within the last two years. In addition, of those enhancing or expanding benefits, nearly half do not plan to shift additional costs onto employees.3 This data suggests that employers that are not willing to enhance benefits or lessen cost-shifting will face an uphill battle appealing to talent in a market that continues to be competitive across many sectors.
In today’s benefits landscape, the right benefits matter. What, then, are the employee benefit trends employers and advisers should be paying attention to?
The employee benefit trends shaping recruitment and retention
It might come as no surprise that employees and job candidates continue to value employee benefits like flexibility in schedule and location, and paid time off.
Given the long arm of inflation, talent is also paying closer attention to health insurance benefit enhancement. This includes talent priorities like:
- Affordability. Voids in coverage in primary healthcare insurance plans can drive up out-of-pocket spending on healthcare costs. This shows up in routine care, with copays, out-of-network costs, and more. It also derives from unexpected healthcare needs that can reveal coverage gaps. Enhancing healthcare coverage can provide more value by closing gaps in coverage and ensuring employees and their families have access to the routine and unexpected care they need to feel their best—and perform well on the job.
- Support for mental health. Employee well-being has been on the decline for several years, with workers across industries reporting high levels of stress. This decline has sparked the Great Resignation, “quiet quitting” and “bare minimum Mondays.” But it’s a difficult problem to tackle. According to research from Deloitte, companies are investing millions in resources, but not all programs are valuable.4 Valuable support for mental health care includes robust coverage for behavioral healthcare as well as easy-to-navigate plans and championship within company culture.
- Pharmacy benefits. Supply chain pressures have made many medications more difficult to find. Finding them is even more difficult when insurance plans only cover generics, not brand-name prescriptions. This drives up out-of-pocket healthcare spending for employees and families and may lead to consequences like delaying or skipping prescription refills, which also introduce other negatives, like poor health outcomes and lower productivity.
Confronting cost containment
Of course, enhancing employee benefits is only part of the equation for companies; the other priority is cost containment. According to SHRM, employers are using a variety of strategies for cost containment, including plan design changes such as, higher deductibles and self-funding, implementing corporate wellness programs, and promoting employees’ use of cost- and quality-comparison tools in making healthcare decisions.5
Employers can also look to innovative benefit strategies, including employer-sponsored supplemental healthcare insurance plans. These plans can be layered over the primary plan and offered to select employee classes or roles as defined by the employer, making them a good option for both employee benefit enhancement and cost containment. The right supplemental healthcare insurance benefits can help employers deliver more value while controlling costs—and keeping employees happy, healthy and loyal.
ArmadaCare’s supplemental healthcare insurance solutions are designed to enhance ordinary health benefits. We offer targeted benefit plans that employers can provide to specific employee classes to help them with recruiting and retaining employees. WellPak® is an all-in-one insurance solution to boost employee mental health and well-being with coverage and access for coaching, counseling and more. Ultimate Health® is designed to meet the expectations of key leaders while helping employers control their benefits budget. Ultimate Health plans include valuable insured coverage that closes voids in coverage, like formulary benefits that also cover brand-name prescriptions (and much more). Learn more about ArmadaCare plans, including how they can help to keep top talent healthy, productive and focused on the business.
2 Mercer, 2023.
3 Mercer, 2023.
4 Deloitte, 2023.
5 SHRM, 2023.