Inflation could take a bite out of benefits spending
Half of employees surveyed said their employer only communicates about benefits during open enrollment.
As costs rise, employees are considering tightening their benefits budgets. Consumers are willing to spend a median $120 monthly on benefits, not including retirement savings, this year. That is down $50 from the previous 2 years, according to new data from LIMRA’s 2024 BEAT Study: Benefits and Employee Attitude Tracker.
“The amount employees are willing to pay has declined over the past few years, no doubt due to inflation and tighter wallet share,” said Kimberly Landry, associate research director for workplace benefits research at LIMRA. “This might lead to employees looking to reduce or drop certain benefits to save money. If rising costs continue, employees may also look to reduce their retirement contributions.”
Employees with higher incomes and those who are married with dependent children, as well as younger workers and those who are already enrolled in workplace benefits indicated they would spend a median of $150 per month on benefits. Employees who are not enrolled in their workplace benefits plan were only willing to spend $100, the report found.
LIMRA said this dynamic represents an opportunity for employers to revisit education around different benefit offerings to improve enrollment and usage. Employees tend to have a higher understanding of core benefits including dental, medical and retirement savings. Understanding around disability insurance and supplemental health plans is lower, which could lead to confusion about coverage or missed eligible claims.
Half of employees surveyed said their employer only communicates about benefits during open enrollment. However, nearly three-quarters of workers (73%) say they would like to receive benefits information more frequently throughout the year from their employer, the report found.
Related: CMS: U.S. employers to spend $1.3T on health benefits this year
Employees were only somewhat interested in bundled benefits, especially if it would save them money, with younger and blue-collar workers expressing a higher interest in the option. More than half of employees said they prefer to pick and choose their benefits.
“To help keep employees engaged, more can be done to improve the overall experience with these benefits,” said Landry. “At present, 71% of employees are at least somewhat satisfied with their benefits while 43% are very satisfied. We have an opportunity to equip both employers and employees with the tools and resources to improve the overall benefits experience.”