The days of signing a contract with an employee benefits vendor and putting your plan out of mind until the contract is due to renew are over.
“The pace of change has accelerated,” says Sander Domaszewicz, senior principal of Total Health Management, U.S., at employee benefits consulting firm Mercer, explaining how benefits are updating as frequently as cellphones are upgrading. Finding out-of-date benefit plans might be similar to seeing a 2007 cellphone in your pocket today.
Regularly assessing and evolving your company’s benefits plans to meet employees’ needs can help you not only attract talented candidates but also retain them for the long term. In fact, in a survey by Pew Research Center, 23% of professionals report that bad benefits were a major reason they left their jobs in 2021, and 20% cite child care issues as a major factor. (Pay tops the reasons overall, with 37% of respondents calling it a major reason for quitting.)
Many companies today are running pilot programs to find out what new benefits their employees appreciate. They’re also offering more choices to appeal to different segments of their population.
“You want to have a benefits plan in place that is attractive, modern — not something that hasn’t been touched in 30 years” says Sena Meilleur, an experienced employee benefits consultant and a managing principal at insurance, financial services, and HR advisory firm OneDigital. “When you need to turn around and suddenly recruit somebody, you [need to] have a really attractive suite to offer them.”
As you consider your own company’s benefits plan and how to evolve your offerings for the year ahead, here’s a look inside nine employee benefits trends.
1. Behavioral Healthcare Access
Prompted by the pandemic, employers are increasing the behavioral health support options they provide. For example, Christine Schulze, principal behavioral health consultant at Mercer, explains that many are offering coaching services for those who could benefit from support but do not have acute needs that require a psychiatrist.
Many are also providing virtual access to healthcare. “Having that virtual option, not only to schedule an appointment but to meet with a provider, is also increasing accessibility for members who may live in more rural areas where they may not have a provider nearby,” Schulze says.
Through an employee assistance program (EAP), such as Modern Health or Lyra Health, employees can access counseling services to address things like stress at home or work, relationship problems, anxiety, and depression. These networks offer licensed therapists in various states.
2. Family-Building Benefits
Employers are doing more to help families grow. One way is by increasing the max reimbursement available for fertility treatment or adoption.
For example, Julie Campbell, principal of Total Health Management, U.S., at Mercer, explains how in vitro fertilization (IVF) often requires more than one treatment to result in a successful pregnancy. The mounting costs can be overwhelming. “There’s a trend toward increasing that dollar limit and making sure that someone can really achieve the family that they want,” she says.
Another thing employers are doing is removing barriers. An employers’ coverage policy for IVF treatment, for instance, is likely to include parameters that require a couple to have unprotected sex for 12 months or a clinical infertility diagnosis.
“Employers are starting to realize that the traditional fertility benefits, in particular, were designed for primarily a heterosexual couple,” Campbell says. “By design, we’re excluding a single individual or an LGBTQ couple from ever being able to access those benefits.”
Surrogacy benefits and financial support for foster care are also receiving increased attention from employers, as is access to general family planning education for prospective parents.
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3. Paid Parental and Caregiver Leave
In addition to welcoming new children, employees may be caring for aging parents, adult children with disabilities, and other relatives in need. While the federal Family and Medical Leave Act (FMLA) covers unpaid and temporary time off for covered instances of leave, and some states and cities have their own mandates for additional coverage, many companies are considering how they can do more.
Expanding beyond offering paid maternity leave to new mothers, paid parental leave can be used by parents of any gender as well as those who adopt or bring a new foster child into their home. Additionally, companies are offering paid caregiver leave so that employees can take time off from work to care for a sick loved one.
Josh Silverman, CEO of the craft marketplace Etsy, credits the company’s parental and caregiver leave policies with helping it achieve high retention rates as well as gender equity in the workplace. The company provides 26 weeks of fully paid parental leave for all genders, which covers birth, adoption, and fostering placements, and up to 12 weeks of paid family medical leave. Both female and male employees at Etsy are promoted at the same rate, have comparable performance ratings, and take similar amounts of parental leave.
The keys to this benefit are ensuring it’s not only financially feasible but also logistically feasible so that it doesn’t overburden other employees. Also, be sure to formalize your policy in your employee handbook. “You can put a paid holistic leave policy in place at any time and people will be super grateful for it,” Meilleur says.
4. Child Care
While the pandemic caused immediate child care challenges due to daycare and school closures, many working parents are still struggling to find affordable and available child care options. It has caused working parents to reduce their hours or leave the workforce altogether if unable to find a solution — and employers are losing talented team members.
To respond to this challenge, some employers are stepping up their child care benefits. Among the clients Meilleur works with, one is now offering on-site child care at no cost to employees. Another is matching the amount that an employee puts into an LSA account set up specifically for daycare expenses. She says, “I had one client say to me, ‘Why are we not all doing this the way that we do health care?’”
5. Menopause Support
As the conversation about menopause becomes less taboo, companies are taking steps to provide support for their female employees who are navigating this stage of life.
Campbell explains two routes employers take: First, employers are providing broader reproductive health support in the forms of education, professional guidance on finding an experienced provider for hormone replacement therapy, and access to alternative treatments such as acupuncture or cognitive behavioral therapy.
“Other employers are rethinking the way they address menopause in the workplace,” says Campbell. In these cases, management training is offered to help leaders understand ways to support their employees, such as providing flexible working policies so employees can adjust their hours to when they’re most productive.
6. Medical Travel Reimbursement
In response to the overturning of Roe v. Wade by the Supreme Court in June 2022, many companies have announced efforts to assist their employees with travel reimbursement for abortion procedures.
For those looking to offer this benefit, Meilleur says it’s important to consider state legislation.
Is your company a fully-insured health plan, governed by state mandates in each of the states your employees live? Or is it a self-funded healthcare plan, held to federal mandates but exempt from state mandates?
If self-funded, you can build coverage into your health plan, as long as you align with federal mandates and laws. For employers who offer fully-insured health plans, Meilleur says, “the best way to address that is actually outside of your health plan completely.” This can be structured as medical travel reimbursement through a tax-free account such as a health reimbursement account.
The same consideration applies for employers looking to offer transgender medical support. “It becomes an interesting conversation around, ‘maybe we should consider self-funding if we want to have more flexibility,’” says Meilleur.
7. Lifestyle Spending Accounts
Lifestyle spending accounts (LSAs) can help you diversify your benefits options to meet a variety of employees’ needs. An alternative to contracting multiple vendors to offer separate niche benefits, LSAs allow you to designate wallets with a set dollar amount to be used for specific purposes.
For instance, your company may choose to offer a $100 per month per employee stipend in one wallet to be used for work-from-home costs. That might cover bills for internet service, new home office gear, lunches — whatever expenses you determine will qualify for that $100 reimbursement. Another wallet could allocate another $100 for wellness costs such as subscriptions to Calm or Headspace. LSAs can also be used to cover development or educational classes that aren’t eligible for tuition reimbursement, or as a way to help with surrogacy and adoption costs.
“The employer really has all of the controls over what’s eligible,” Domaszewicz says. “You don’t have to start out with everything; you can start out with a narrower scope of eligibility and then you can add things over time, which is a great way to get more mileage through the benefit and be able to continue and expand to offer new benefits.”
He adds that they are gaining significant attention. “We’ve seen more activity probably in the last six or 12 months around lifestyle spending accounts than we have in the last six-plus years,” he says.
8. Financial Planning Support
Financial planning needs extend far past managing stock portfolios and saving for retirement and have become urgent for the many people affected by pay cuts and hour reductions during the pandemic.
To offer support on these issues, employers can connect their employees with a professional to help establish budgets and accomplish their financial goals. For instance, employees can benefit from guidance from a financial advisor on how to develop a savings plan for kids’ college tuitions or pay off student loans.
“When that gets offered by an employer as a benefit, completely separate from the retirement plan, it has a whole different meaning to it,” says Meilleur.
9. Four-Day Workweek
Over the past year, companies have been participating in four-day workweek trials and pilot programs, which have largely concluded with similar rates of production and less stressed workforces. Many employers choosing to adopt a 32-hour workweek for the long term understand the importance of ensuring a better work-life balance to avoid burnout and increase retention.
Goosechase, a tech company that enbles employers to create interactive onboarding and training activities, has been operating on a four-day workweek since the summer of 2021. “The flexibility we’ve been able to give the team allows them to be more fulfilled both on and off the clock — and happier employees means greater retention and engagement,” says Natasha Delisle-Barrow, the firm’s head of people.
The four-day workweek is also an attractive benefit for potential candidates. “People simply aren’t evaluating compensation the way they were before; it’s not all about the monetary value of a paycheck,” explains Delisle-Barrow. “People are asking, ‘How else can this job enrich my life?’ And giving people some time back every week is a great start.”