2024 Employee Benefits Benchmark Report

Jun 5, 2024

It’s shaping up to be another challenging year for employee benefits renewals, as factors such as inflation, expensive prescription drugs and high-cost claimants are prominent. In fact, such trends are the reason employers are bracing for the most challenging renewal cycle since the beginning of the pandemic.

In addition, employers are grappling with overall escalating costs, with 26% seeing benefits increases of 4-6.9%, according to the 2024 Employee Benefits Benchmark Report, which polled organizations in late December.

One-third absorbed the cost increases by raising employee contributions and 22% changed the plan design.

Affordability will continue to be a challenge for employees and employers. Among the biggest factors impacting affordability are higher pharmacy prices, new gene therapies on the market, and additional costs due to long-term covid.

It’s easy to see why respondents are focused on ways to control costs this year.

Expect employers to focus on pharmacy use, total cost of care, physical and mental well-being, and care navigation to manage costs. Though newer offerings such as family benefits and student loan assistance are currently low priority, the topic will continue to grow amongst employers. About one-third are interested in increasing well-being benefits to focus on the whole employee.

Health Savings Accounts (HSA) will continue to be popular. Already, 81% of respondents offer an HSA to employees and 66% provided contributions to each employee’s account.

Of course, an employer can offer as many benefits as they want but, if an employee isn’t aware of them or doesn’t understand how to use those benefits, they won’t impact spending.

That’s why employers are focusing more on communicating their benefits as a form of driving employee well-being, recruitment and retention. Two-thirds (67%) said increasing education on benefits offered is their biggest opportunity for improvement.

They noted that the use of a website, digital app and videos are the most effective forms of communication.

Such digital options are also being used more often to renew benefits. Organizations are overwhelmingly moving to digital renewals, with reliance on paper enrollment down 14% year-over-year.

Reach out to an Advisor

These trends and many more are presented in the 2024 Employee Benefits Benchmark Report. Stay ahead, stay informed and let Unison Risk Advisors guide you in optimizing your approach to employee benefits in 2024 and beyond.

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