The holidays are in the rearview mirror. Ahead lies the new year. As we embark on 2023, both employers and employees are grappling with a changed employee health benefits landscape.
There isn’t a single reason why; instead, the driving factors are numerous—and interconnected. They include:
- Changes in employee expectations about benefits, and even the very nature of their relationship with employers
- Continued difficulty in attracting and retaining talent across industries
- An increased emphasis on employee well-being
- The differing needs of a multigenerational workforce
- Financial strain from inflation and rising healthcare costs
Employee benefits still matter—a great deal, in fact. Yet the one-size-fits-all benefits approach is no longer enough. It’s cost-prohibitive to use primary healthcare plans to meet all employee health benefit needs. Yet these plans fall short in addressing the most critical gaps between what employers can offer and what employees want.
Investing in the right employee health benefits can drive better outcomes, for employees as well as business. To guide advisers and employers on navigating the new year, we’ve rounded up five key 2023 employee benefit trends, as well as why they matter.
Five employee benefit trends to watch in 2023
#1. Employee health benefits that strengthen retention and build loyalty
Let’s not sugarcoat it: it’s harder than ever to attract and retain the right talent. Employee satisfaction and loyalty rates have rapidly declined, and millions of employees are actively testing the job market.
Employee health benefits, however, are still the #1 driver of retention1. Innovative supplemental healthcare benefits can help employers tax-efficiently* enhance compensation, provide targeted benefit enhancement for specific roles and make employees feel rewarded—all of which can boost loyalty.
#2. Employee health benefits that improve affordability
Rising healthcare costs and high inflation rates have employees feeling the pinch. In fact, 50% of US adults struggle to afford healthcare costs, even for everyday and routine medical expenses.2
Employers are wising up to the unintended consequences and costs of years of cost-shifting. In 2023, many are looking beyond HSAs to enhance employee health benefit offerings3 to provide more valuable insured coverage, close voids in coverage and reduce financial strain.
#3. Employee health benefits flexibility for a multigenerational workforce
For the first time, there are five generations in the workforce, from traditionalists (born 1925-1945) to the oldest members of Gen Z (born 2001-2020). Employees have different benefit requirements at different stages in their lives, and it is difficult and cost-prohibitive to meet them with a single primary care plan.
Savvy employers are using supplemental healthcare insurance benefits to balance coverage and cost while providing benefits relevant to different generations’ needs. Doing so is a win-win, as healthy employees are happier and more productive.
#4. Employee health benefits that support mental health and well-being
It’s been a stressful three years—and the strain hasn’t eased. In fact, half of employees claim mental health as a reason for leaving their jobs this year.4 Employers are riding a fundamental shift from a traditionally transactional to more supportive approach that recognizes and meets the needs of the whole employee. The right employee health benefits can provide enhanced access to care and coverage with support for behavioral health, counseling, coaching and more—even for healthy employees.
#5. Family-friendly and reproductive employee health benefits
Employees are increasingly prioritizing. family health and reproductive benefits. Many employers are enhancing access to such benefits as fertility treatment coverage5 to demonstrate support and address affordability. The right employee health benefits help employers expand these while managing health plan costs.
Employee benefit trends will continue to shape the employee benefits landscape into 2023. Innovative, flexible benefits—like ArmadaCare’s range of plans—can help employers address changing expectations while finding the right balance between coverage and cost.
*This is not local, state or federal tax advice as each person and each company is unique. It is recommended that you seek the independent counsel of a professional tax adviser.
ArmadaCare’s insurance policies are underwritten by Sirius America Insurance Company and Transamerica Life Insurance Company. Insurance plans and coverages vary by state. Please contact us to confirm state availability.
1 Predictive Index, 2022
2 KFF, 2022
3 Mercer, 2022
4 HRD, 2022
5 Mercer, 2022