7 Benefits Trends HR Needs to Know This Year

What’s driving benefits choices, prices and adoption?

It’s a question that nearly all HR pros need answered so they can create a plan that works best for employees.

Benefits Trends for All Employers

Here, we’ve gathered the most current benefits trends and what they’ll mean for HR pros across industries and company sizes.

1. Employers Become the Anchor

Employees not only rely on their employers for benefits: They trust their employers to provide them with and steer them to the benefits that are right for them, right now.

Nearly three-quarters of employees are confident they will have employer-sponsored benefits that fit their needs, despite legislative uncertainty, according to ADP’s TotalSource Employee Benefits Survey.

“As external confidence in the healthcare system weakens, employees increasingly look inward to their employers for stability and reassurance,” the researchers noted.

What employees say they value most:

• Medical insurance (93%)
• 401(k) retirement savings plans (63%), and
• Dental insurance (60%).

Fast tip: While you’ll always need to keep organizational priorities in focus when creating benefits plans, you can still gather feedback from employees on their needs and work to accommodate most.

2. Employers Are the Navigator

While employees expect and believe that their employers will provide them with the benefits options they want, they also hope you’ll help them navigate it all.

Almost 80% of employees say they want personalized guidance on benefit choices, according to Voya’s most recent State of the Employee Benefits.

“Feeling confident about benefits starts with being informed, educated, and connected—not just during open enrollment, but year‑round,” says Pat Tupper, Head of Benefitfocus at Voya.

Fast tip: Both studies emphasized personal guidance during enrollment. Even better, start education outreach before the actual enrollment process starts. That can help employees identify their areas of interest, needs for clarity and questions that must be answered.

3. Employers, Employees Focus on Preventive Healthcare

The total health benefit cost per employee increased by 8% in the past year, the Voya researchers found. The causes include:

• Sub-optimal health care usage. For instance, nearly two-thirds of emergency room visits are non-emergent or are treatable in lower-cost settings such as primary care, telehealth and urgent care centers.
• Chronic conditions management. This spend increased 2% year-over-year primarily due to a 12% jump in prescription costs
• Rising pharmacy spend. Bottom line: Pharmacy costs are the largest portion of total benefits spending at nearly 30%. Nearly 60% of the prescription spend is for brand drugs, 35% is for specialty prescriptions and 7% is for generics.

Fast tip: Voya researchers emphasized two strategies: 1) Streamlining processes and access to care so employees can quickly get the healthcare they need when they need it, and 2) Communicating often and clearly how employees can access preventative healthcare and the importance of pursuing it.

4. Employees May Make Dangerous Tradeoffs

More than 25% of employees have skipped medical care for themselves or a family member because of out-of-pocket costs, the ADP study found. Twenty-two percent have stopped taking or have taken less medication to save money.

“Cost is not just shaping preferences; it’s influencing real decisions and pushing employees to make decisions that can affect their health care,” the researchers said.

Fast tip: Employees weary of their healthcare costs would benefit from simpler plan design, clearer education, and flexible healthcare and cost options. If you can offer that, you can help employees make cost-conscious choices without sacrificing care and safety.

5. HSAs and FSAs Becoming More Important

Despite pulling back on receiving healthcare, employees are more prepared to handle unexpected costs. But it’s not with confidence.

On average, employees have more than $2,300 set aside for unexpected care. But nearly 40% of employees feel unprepared to handle out-of-pocket expenses, the ADP study found.

“Higher savings have not translated into greater peace of mind for employees navigating healthcare costs,” the researchers noted.

Fast tip: If you don’t offer Health Savings Accounts (HSAs) or Flexible Savings Accounts (FSAs), consider instituting them. They can help employees save with confidence for healthcare expenses. If you already offer HSAs and FSAs, increase education so they understand how to manage them and decide to enroll.

6. Employees More Anxious about Retirement than Healthcare

Medical insurance may be the most valued benefit, but financial security — specifically, retirement savings — is what keeps employees up at night.

For the first time in the history of the ADP study, retirement savings surpassed dental insurance as a top priority for employees.

“Retirement savings is quickly moving to the center of employee priorities, reflecting
growing awareness of longevity risk, economic uncertainty and the need for stability beyond today’s health care needs,” the researchers said.

Fast tip: You’ll want to prioritize financial wellness through accessible, well-communicated retirement benefits programming. Better yet, make financial education — which would cover all areas of employee financial planning — part of your benefits education and enrollment.

7. Financial Stress Impacts Mental Well-Being

These financial concerns will likely impact mental well-being.

Nearly 80% of employees say financial stress often or sometimes affects their mental health and well‑being, according to the Voya research. Compounding that: About 40% of employees worry about the costs of finding the mental health care they need.

“With rising costs, economic pressure, and growing mental health needs, employers are under real scrutiny to decide where benefit dollars will have the greatest impact,” says Andrew Stocker, President, Employee Benefits at Voya. “When benefits are aligned to actual employee needs, employers can help drive and support healthier behaviors, stronger engagement and better productivity without simply increasing spend.”

Fast tip: When possible, offer tools (usually through your benefits providers) that show employees how to optimally allocate their next-best dollar across health, retirement and emergency savings.