5 game-changing trends in employee benefits for 2024

As we enter 2024, the employee benefits landscape continues to evolve, presenting challenges and opportunities for brokers and their clients. Economic uncertainty and rising healthcare costs may persist this year as new trends come to the forefront with the emergence of voluntary benefits and AI technology.

For brokers, understanding what businesses are looking for in employee benefits and the latest trends in the industry can help you evaluate your client’s offerings to meet their needs best and respond effectively to their challenges. In this blog post, we explore the trends in employee benefits to watch in 2024 and how they will impact employers and the workforce.

1. Employers may be footing the bill for rising healthcare costs

Finding ways to alleviate rising healthcare costs while keeping employee benefits affordable may be a top priority for employers in 2024. According to a survey from Mercer, a benefits consultant, healthcare prices may increase as much as 5.4% this year due to several factors, including medical inflation and consolidation of health systems.¹

What does it mean for employees? The Mercer survey revealed that two-thirds of employers either do not plan to shift any cost increases to their workforce or will pass on less than the expected rise of healthcare inflation in 2024.¹

In an effort not to pass the buck onto workers, companies may plan to implement the following cost reduction strategies this year:

• Shopping around for different benefits plans with better rates
• Absorbing premium increases
• Eliminating health savings account (HSA) contributions
• Reducing or doing away with wellness activity requirements to earn discounts on coverage

2. Voluntary health will be an emerging benefit

We’ve seen a rise in the popularity of voluntary health benefits in the last decade as a differentiator for employers to leverage as a recruitment and retention tool. The pandemic, inflation, and a tight labor market continue to generate demand for voluntary health plans.²

Employers can offer this coverage because of the health awareness and opportunity to reduce out-of-pocket costs and offset higher deductibles. At the same time, employees are attracted to these benefits for their ability to help protect their finances against an unexpected illness or injury. In the past three years alone, there’s been substantial growth among organizations offering critical illness and hospital indemnity coverage.²

3. Employee wellness should remain a priority

U.S. workers are some of the most stressed employees in the world.³ Rightly so, the lingering effects of the pandemic, increased job duties, and financial concerns have contributed to elevated stress and burnout among today’s workforce.⁴ Wellness may remain a point for employers to address and better support employees’ mental, physical, and financial well-being.

Wellness services employers may plan to implement in 2024:

• Employee assistance programs (EAPs)
• Financial wellness and career development services
• Access to mental health support
• Flexible workplace hours

4. Simple benefits and intuitive technology may dominate the landscape

Avoid the technical jargon and complex terms; employers are attracted to easy-to-understand benefits and easy-to-use technology platforms to get the most out of their coverage plans. The tech component plays a vital role. According to a 2023 report, 8 in 10 employers surveyed stated it’s essential for their benefits provider to lead in technology.⁵

Brokers are seeking real-time quoting, self-service tools, and a platform for implementation support. Brokers can be instrumental in helping clients understand the benefits and technology that supports their needs.

5. AI streamlines and enhances employee benefits administration

Looking back, 2023 marked a turning point in artificial intelligence (AI) and generative AI. Regardless of the industry, the uses of AI have become mainstream in the workplace, revolutionizing how organizations operate and make decisions.

Moving forward, this technology has the potential to help employers streamline and enhance their benefits administration, helping to reduce costs with personalized plan options, automating manual tasks (i.e., open enrollment, verifying eligibility, claims processing, etc.), and improving compliance and risk management. While many employers have embraced AI technology to administer employee benefits, more businesses are predicted to follow suit in 2024.

Takeaways

Heading into 2024, employers will continue to deal with the same challenges they’ve faced over the last several years with inflation and rising healthcare costs. However, emerging employee benefits and AI technology may present better outcomes to help keep the workforce healthier, happier, and more productive.

By staying aware of your client's evolving needs, brokers can position themselves as invaluable partners to help employers navigate the intricate world of employee benefits and deliver affordable yet desirable benefits.

References

¹Mercer. “Health benefit cost expected to rise 5.4% in 2024.” Published 9.7.2023. Accessed 12.12.2023.

²Goldman Sachs. “2023 Benefit & Compensation Trends: Inform Your Future Benefit Decisions.” Published 2023. Accessed 12.12.2023.

³Gallup. “Globally, Employees Are More Engaged – and More Stressed.” Published 6.13.2023. Accessed 12.13.2023.

⁴American Psychological Association. “Burnout and stress are everywhere.” Published 1.1.2022. Accessed 12.13.2023.

⁵Aflac. “2024 employee benefits trends brokers should know.” Published 2023. Accessed 12.12.2023.