Employee benefit offerings are expected to continue evolving in response to shifting workforce priorities, technological advancements and global trends.
Providing a well-rounded benefit package to employees is as important today as it has ever been. The workforce's demands have changed significantly since the 2020 pandemic, and employers need to constantly evaluate what they provide and how they provide it. While 77% of employers feel their benefit offering currently meets the needs of their workforce, employers must not get complacent and should proactively monitor employee needs, satisfaction, and the overall employee benefits market.
Employers told us that structuring a benefit program to attract and retain necessary talent is more challenging today than it was two years ago.
Assurex Global unites the top independent insurance agencies from around the globe, making us the largest independent insurance agency in the world. Each month, we survey employers on various topics related to employee benefits and human resources. This report compiles insights from the 2024 surveys, highlighting key trends and actionable data to help companies strategically prepare for the future.
Like in last year’s report, rising healthcare costs are front and center for employers. Medical inflation, provider consolidation, rising chronic conditions, and new pharmaceuticals and gene therapies are many of the factors driving higher costs for both employers and employees.
Managing costs to meet budget remains the #1 employee benefits priority for employers.
A surprising 60% of employers are not taking specific action to manage costs to meet budget.
Each year, employers face the challenge of navigating medical plan cost increases, a trend driven by factors such as rising healthcare utilization, inflation, and advancements in medical technology. These cost hikes can significantly impact both organizational budgets and employees’ out-of-pocket expenses. For employers, understanding the factors behind these increases and developing strategies to manage them is critical for maintaining a competitive benefits package.
• Most Common Plan Increases: 24% of employers received a medical plan increase between 4 and 6.9%, while 23% saw an increase of 10% or more for 2025.
• Top Cost Drivers: Employers identified pharmacy expenses, increased utilization, and catastrophic claims as the primary contributors to rising costs. 33% were unsure.
• Plan Adjustments for 2025: 35% of employers opted not to make any changes to their medical plans. Among those who did, the most common adjustment was raising employee contributions (34%) followed by changing the plan design (19%)
There is no denying the impact that pharmacy has on overall benefits spend, and as noted above, employers identified pharmacy as the top cost driver for their medical plans.
Pharmacy costs continue to skyrocket, and costly GLP-1 drugs are grabbing headlines. Employers are implementing various strategies to mitigate their pharmacy spend.
Top Strategy Adjust copays/plan design is the top strategy employers are implementing to manage pharmacy spend.
In Numbers 38% of employers cover GLP-1 drugs for diabetes; only 5% cover diabetes and weight loss. A surprising 51% were unaware of how their plan covers GLP-1 medications.
Three-fourths of employers have their prescription benefit manager (PBM) bundled with their medical insurer or administrator. While this arrangement can be efficient, it can also restrict employers from developing a pharmacy program that optimizes performance.
Employers need a proactive and creative approach to managing benefits costs. Balancing the budget with the desire to offer a robust benefits package requires ongoing attention. Employers should work closely with their employee benefits brokers continuously evaluate their plan(s) and explore new and different offerings in the market.
Additionally, employers must understand the impact that pharmacy spend has on the overall plan. Drug costs continue to increase due to the greater utilization of the healthcare system, the higher use of specialty drugs, and the rising distribution costs from pharmaceutical manufacturers. These higher prices are making some medications unaffordable for the average worker.
The topic of mental health has been front and center for many years and was elevated during and post-pandemic. Employees bring their mental health challenges to work, and untreated mental illness can lead to higher medical costs, lower productivity, and shorter lifespans. Many employers continue to recognize the role they can play in helping their workforce, but there is still room to address the entire needs spectrum.
• 26% will increase mental health services for 2025 (the highest response we received since 2021).
• 41% said mental health was the wellbeing pillar they would invest the most in 2024.
• 68% said having more mental health tools and resources is a higher priority than 2 years ago.
Employers should continue to promote the mental health resources available and monitor the appetite and need for additional solutions. No longer limited to employee assistance programs, the mental health market encompasses a broad range of solutions aimed at helping a wide variety of needs.
Companies seeking to address mental health issues from all angles can also consider other benefit offerings that, while they don’t directly address mental health, can provide relief from mental stress. Some can include long-term care insurance, disability insurance, critical illness coverage, accident insurance, and hospital indemnity insurance. Additional tools and resources will be important for tomorrow’s workforce and lessen the mental health stigma within the company culture.
In today’s economic climate, supporting employees’ financial wellness is more critical than ever. Rising living costs and financial stress can impact well-being and productivity, prompting employers to enhance benefits programs. By offering resources like financial planning tools, emergency savings options, and student loan assistance, organizations provide meaningful support while balancing budget constraints. Investing in financial wellness is a strategic way to boost retention, engagement, and overall morale.
Employers overwhelmingly offer retirement plans and health savings accounts (HSAs), both excellent employee savings vehicles.
• 80% of employers contribute to retirement plans. The most common retirement plans offered are traditional 401(k)s (76%), Roth 401(k)s (60%) and 403(b)s (15%).
• 86% of employers offer an HSA, and 66% of employers contribute to their employees’ HSAs.
• 18% of employers offer long-term care benefits, either as a group or individual policy or as a rider attached to a life insurance policy.
Employers are taking steps to ease financial strain and demonstrate a commitment to support employees’ financial well-being. In 2025:
Employers continue to move toward providing customizable, tailored options that allow employees to personalize benefits to their unique financial circumstances and needs.
Voluntary Benefits
52% of employers plan to offer additional voluntary benefits next year; accident and critical illness are the most popular voluntary benefits currently offered.
This data shows that employers increasingly consider financial wellness a key component of overall employee well-being. While many employers support financial security through retirement and HSA contributions and focus on maintaining employee contribution levels, there is room to address financial needs further and offer more customized benefits.
Different generations have different events that create financial stress. Expanding longterm care, financial coaching, student loan benefits, and other programs could provide even greater support for employees’ financial wellness. As offerings become more personalized, companies should revisit 1:1 meetings when communicating benefits. Only 19% will do so in 2025, but demand for such a setting may grow in future years. By investing in flexible benefits platforms and enhancing communication around existing programs, employers can further empower employees to tailor their benefits to meet unique financial needs, aligning with the growing demand for personalization.
As employers refine their benefits strategies, the interconnectedness of cost containment, mental health, and financial security is clear. Effective cost management allows companies to maintain and expand essential benefits, ensuring employees access resources for mental well-being and financial stability. Employers help reduce stress-related costs by supporting mental health and creating a more resilient, productive workforce. Meanwhile, financial wellness programs offer employees peace of mind and enhance their ability to manage daily expenses and plan for the future. Together, these elements create a balanced approach to benefits, fostering a healthier, more engaged workforce while helping employers sustainably manage costs.
While the workforce continues to change, the future of employee benefits will likely focus on flexibility, personalization, and improving the employee’s total well-being. Business leaders should continuously review and modernize their benefit offerings to support the workforce and align with the company’s overall objectives.
We trust this report is a valuable resource for business leaders, offering insight and strategies to navigate the ever-changing benefits landscape, optimize offerings, and support the organization’s growth and success in the coming year.
To view the full findings of our 2024 Market Check Surveys, please access our 2024 Market Trend Report. Should you need assistance understanding the findings of any of these topics, please contact our Employee Benefits Team.