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As we embark on the new year, we’re sharing insights on five trends shaping the group benefits landscape in 2024. These predictions highlight the evolving priorities and challenges facing both employers and employees in the coming year.
- As healthcare costs rise, employers will focus on ways to enhance benefits while continuing to control costs. Over the last year, employees across the country have been managing rising healthcare costs, and a recent report of employers by Mercer shows health benefit costs are expected to increase, on an average, 5.4 percent in 2024. As costs rise, employers will likely continue to look for additional high-value benefit options to help supplement their medical plan, while filling the financial gap that rising deductibles and out-of-pocket maximums can create for employees. Voluntary benefits, also known as supplemental health benefits, have become a common way for employers to help their employees reduce financial exposure that comes with healthcare costs. Looking ahead, we expect to see employers increasingly turn to voluntary benefits as a way to create more holistic benefit offerings. In fact, a recent study conducted by the Life Insurance Marketing and Research Association (LIMRA) and EY found that 62 percent of large employers plan to increase the number of benefits offered in the next five years.
- Financial wellness will remain a key priority. In addition to managing higher healthcare costs, recent data from New York Life shows 58 percent of employees report the rising costs of everyday expenses as a top financial concern followed by saving for the future (37%) and healthcare costs (28%). As 2024 progresses, an increasing number of employees will likely look to their employers for benefit offerings that can provide financial protection. In response, we expect to see employers seek to drive greater education and awareness around benefits that support financial stability, including voluntary benefits, disability and life plans, and other financial wellness tools.
- A continued focus on new technologies and data integration. In 2024, we will see the power of new digital technologies and greater data integration grow in the employee benefits space. Data integration can help streamline workflows for HR teams, making it easier for HR leaders to focus less on administrative activities and more on helping employees. At the same time, we’re seeing advancements when it comes to generative AI, advanced analytics and other digital-enabled services, which may start to translate into more personalized experiences for employees and provide greater value to employers in 2024. Notably, we’re seeing employers expect this from their benefits vendor-partners—data from LIMRA and EY showed 2/3 of employers say they will rely more heavily on third-party technology in five years and 59 percent say they will choose carriers based on their ability to connect with their employee benefit technology platform. Therefore, we expect to see employers continue to focus on digital tools and technologies that can both enable efficiencies and easily connect with their existing platforms.
- Remote and hybrid work policies will attract and retain a more diverse talent pool. Going into 2024, we are seeing remote and hybrid work policies remain in place at many companies with some tweaks made as a result of learnings over the last couple of years. This approach continues to allow companies to tap into a more diverse talent pool – specifically people with disabilities. In fact, individuals with disabilities aged 25-54 were 3.5 percent more likely to be employed in Q2 2022 than pre-pandemic according to research by Economic Innovation Group (EIG). To sustain this positive momentum, there is an opportunity for employers to focus on accommodating the needs of people with disabilities in both hybrid and remote work settings, and we expect this to be a key component of broader recruitment and retention strategies in 2024.
- Increased attention on mental health offerings, especially for caregivers. Mental health in the workplace continues to remain a top priority for employers, and data from a New York Life Group Benefit Solutions survey showed employers should also consider how caregivers are being impacted as they care for loved ones and family members living with mental health challenges. The survey showed that nearly half of employed adults (48%) surveyed have helped a loved one live with a mental health challenge in the past year and 80 percent of caregivers say their own mental health has been impacted as a result. As employers help workers navigate these challenges, we expect to see a greater emphasis on educating employees about mental health offerings. In addition, we’re likely to see employers consider more flexibility and paid time off benefits for mental health and caregiving needs.
From helping employees manage healthcare costs to overall financial wellness, integrating new technologies, and navigating continued changes in how we work and manage mental health, these predictions represent key areas of focus where employers can contribute to creating supportive and productive workplaces. We look forward to continuing to create new products and solutions to help our clients navigate existing and new challenges in 2024 and beyond.