Employer health and benefits must adapt to remain affordable and attractive for future workers

As health care costs rise and access to medical care for many insured employees becomes difficult to afford, employers must seize opportunities to drive higher health care efficiencies and provide new benefits to attract and retain talent. Inflation is impacting employees greatly, and rising health care prices amplify existing affordability issues. These rising costs for employees are a particularly important consideration for employers today, as this is still an employee’s market.

Aon recently released its Health Survey for 2023, which details employer priorities in health and benefits strategies and shows how they are responding to looming health care inflation, which is forecasted to rise 6.5% this year to more than $13,800 per employee on average.

Survey data shows 71% of employers already offer high-deductible health plans (HDHP) as a choice during benefits enrollment. With just 10% interested in adding HDHPs, few employers can wring additional savings through the traditional combination of high deductibles, savings accounts and consumer tools.

To combat rising costs and make health care more affordable, more U.S. employers are adapting value-led approaches that steer plan participants toward high-quality, cost-effective hospitals and physicians using a combination of narrow network strategies, plan design, provider guidance services and financial incentives. Thirty-seven percent of employers said they were interested in using plan design to steer members to optimal providers, while 35% already have these plan design features in place.

Inclusivity and wellbeing

Employers also are prioritizing wellbeing. In the current climate, employers must make strides towards providing all their workers with the wellbeing resources to adapt, manage stress and navigate today’s shifting work environment. As the workforce becomes more inclusive towards all people, health and benefits must follow suit. Across gender, race, sexual orientation, financial status and those with health conditions, employers that take all their employees’ wellness seriously are more likely to retain them and foster a positive company culture, which in turn leads to productivity and wider firm innovation.

According to the survey, employers are addressing the inclusivity and wellbeing needs through:

• Implementing health and benefits packages like:
  • Digital health apps for chronic conditions (33% are interested in adding it and 35% offer it today)
  • Voluntary benefits (29% interested in adding and 49% offer it today), such as insurance policies for critical illness, accident, hospital indemnity and life, as well as student loan assistance programs, identity theft protection, legal benefits, pet care and auto/home protections.
  • Abortion access. Of those surveyed, 64% follow the insurance carrier’s standard policy, 29% include abortion in a broader travel benefit through the health plan to provide financial assistance to obtain care in a state where it remains legal, 10% have removed abortion coverage in accordance with state law, 9% offer abortion-specific financial assistance through the health plan to obtain care in a different state and 2% offer abortion-specific financial assistance to help with travel and lodging to another state that is separate from the health plan.

As well as offering more inclusive support for a wider range of employee needs like:

• Supporting all paths to parenthood through elective fertility and preservation services as well as support for adoption and surrogacy (38% interested in adding and 37% offer it today).
• Adding paid time off to support alternative family structures (35% interested in adding and 36% offer it today).
• Navigation support to find culturally competent medical professionals for LGBTQ+ (43% interested in adding and 19% offer it today) and people of color (46% interested in adding and 12% offer it today).
• Financial benefits such as financial wellbeing tools, discount platforms and emergency savings accounts (36% interested in adding and 47% offer it today).

Employers that are looking to build a more resilient workforce must accelerate innovation and evolve their health and benefits programs. Employers have the unique opportunity to enhance the value of their benefits to better meet the career, financial and health goals of a wider spectrum of their employees, improving the lives of millions of people in the process.

Farheen Dam, Aon’s North America health solutions leader