Employers’ top 2023 priorities: Personalized plans, contained costs, and employee satisfaction

Despite inflation, employers are striving to strengthen benefits packages and create more tailored offerings for their employees. That’s one key takeaway from Alera Group’s “2023 Employee Benefits Market Outlook.” The first in what the independent national insurance and wealth services firm says will be an annual report reveals how inflation, changing medical needs and a multi-generational workforce are impacting employee benefits offerings. It also provides strategies and approaches employers can use to address challenges and achieve success this year and beyond.

“In 2023, there is no ‘one size fits all’ approach to benefits. Market conditions will be complex and uncertainty will continue,” Sally Prather, executive vice president and employee benefits practice leader at Alera Group, says in a statement. “Employers need to tap into the data on what their employees need and want — as well as the factors driving costs — and shape their benefit plans, cost-containment, and retention strategies accordingly.”

Here are three key findings from the 2023 Employee Benefits Market Outlook:

• Inflation and the rise of specialty drugs fuel price increases.

Employees and employers alike are feeling the effects of rising health care and pharmacy rates. A spike in utilization of specialty drugs and obesity medications are major cost drivers, and employers need to implement strategies to get ahead of this trend.

• Despite rising costs, employers are strengthening packages and offering more tailored benefits.

There’s an increasing demand among today’s multi-generational workforce for personalized benefits. New options such as lifestyle spending accounts and voluntary products allow employers to offer competitive packages without increasing costs. They also allow employees to pick non-traditional benefits that are important to them.

• The long-tail impact of COVID and the Great Resignation is bigger than expected.

The fallout from the pandemic is associated with an increase in mental health concerns, resulting in higher levels of stress and feelings of burnout. At the same time, access to mental health providers is limited nationwide. To fill the gap, employers are increasingly leveraging teletherapy.

Related: With health care costs rising fast, it’s time to rein in chronic disease expenses

“This report will provide business executives with the tools, insights and analysis to build a stable and engaged workforce in the face of economic volatility,” Prather concludes.