Cost-Sharing is a growing trend used by employers to help mitigate health insurance premium increases and alleviate unnecessary or wasteful health plan utilization. Co-pays, co-insurance, and deductibles are all tools that employers can use to share healthcare costs with their employees. As costs continue to rise, it’s important for employers to incorporate health care analytics and use supplemental health insurance benefits to find the right balance between controlling benefit costs and offering robust enough benefits to retain talent.

• Tailor benefits to different employee groups and provide meaningful compensation value with tax-efficient benefits using an employer-sponsored supplemental health insurance plan.
• Incentivize employees to seek cost-effective care options. When employees must pay expenses, there is more responsibility for them to be wise healthcare consumers and they are more likely to look for and choose cost-saving options when possible.
• Offer common health coverage recommendations such as a free or very low-cost employee-only option, low-to-no deductible plans, salary-based contributions, high deductible plans coupled with a health savings account or health reimbursement arrangement, and others. Removing copays and deductibles altogether may reduce long-term healthcare costs with a healthier workforce.

Benefits & Financial Education will be crucial to keep employees healthy and help guide them on their journeys to be educated health care consumers, maximize their benefits, and understand the importance of routine care. As employers struggle to mitigate rising health care costs in 2024, many will focus on improving employee health care literacy and providing new types of education, which can include a financial wealth advisor for employees who need financial help and advice. Because of the changes to modern work in the last few years, employers should expect new-found questions that will require more specific and nuanced education to provide better answers for employees.

Pharmacy Management Strategies can be implemented to help organizations take action to address rising drug costs. Behind the pharmacy cost increase this year are specialty and costly prescription drugs (especially the high demand for gene therapies and weight loss drugs). As pharmacy costs continue to concern employees and impact employers significantly, the following strategies can help manage these specialty prescription drug costs:

• Explore transparent pharmacy benefits managers (PBMs) and more savings tactics such as prior authorization, step therapy, site of care management, and limited approvals for initial supplies of a new medication.
• Make plan design changes (such as higher cost-sharing) to address costly medications and treatments.

Student Loan Assistance can be an attractive benefit to top talent. Through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, employees could receive up to $5,250 per year toward student loan payments as part of their employer-sponsored educational assistance benefits. If employers have workers who are interested in getting student loan repayment support, they can hire a third-party administrator to take care of the details and stay compliant.

Wellness Stipends can account for a lot of financial concerns by allowing employers to invest in their employees’ physical, mental, and financial wellness. From child and pet care to mattresses and gaming chairs; from elder care or commute help, to travel costs for vacations.

Lifestyle Spending Accounts (LSAs) are versatile, post-tax accounts that can support employee needs in many areas that need more attention. The LSA has a high perceived value because it can address situations such as food access, women’s health, and family planning.

• Recent industry publications have examined why food access can help address chronic diseases and lower health care costs. The LSA can assist employees struggling to afford groceries or prepare nutritious meals by including eligible expenses such as healthy meal delivery, cooking classes, and specialty cookware.
• Regarding women’s health and family planning, the LSA can offer reimbursement for grocery delivery and meal prep to relieve household tasks, self-care activities such as massages and facials, hotel and related “weekend getaway” costs, sleep and meditation apps, vitamins and supplements, and more.

Commuter/Transit Accounts can effectively help employees save up to 30% on payroll taxes by setting aside funds to cover their commuting expenses, and employers can save on payroll matching expense for the set-aside funds.

Dependent Care Assistance Programs (DCAPs) or Dependent Care Flexible Spending Accounts (DCFSAs) are under-utilized options for employers to address the financial support gaps often experienced by caregiving employees. These accounts can be used for the care of children under the age of 13 and for the care of dependent adults who need supervision while the employee is at work. Workers can save 30% or more in payroll taxes on the sums set aside for these accounts, and employers can experience significant ROI while saving 7.65% in payroll matching expense for the set-aside funds.

Employer-Assisted Housing (EAH) Programs provide employers with the opportunity to help their staff realize their dreams of homeownership, when high mortgage rates and cost-of-living expenses make it difficult for employees to own their own homes. With EAH programs, employers can really stand out from the competition, increase morale, and improve retention. Options include down-payment assistance, housing loans, rental assistance, or allowing employees to contribute a pre-tax portion of their income to a homeowner savings plan.

Retirement Programs for small businesses will trend upward in 2024, as PEOs allow SMBs to offer robust retirement plans to their employees. Under the SECURE 2.0 Act, it is easier for workers to build their retirement savings, provides employers with additional avenues to offer retirement plans, and small businesses can now receive tax credits to offer retirement programs. Helping employees save for retirement allows them to focus more on work and less on worrying about their finances.

• Employees should be educated on their opportunities to save for retirement and how their employers can help them under the SECURE 2.0 Act.
• Provisions such as expanded eligibility for part-time employees, optional Roth contributions, more exemptions from early withdrawal penalties, and incentives to save can help give employees a head start on their retirement planning.

Earned Wage Access (EWA) Programs give workers a sense of financial security and psychological safety, while increasing employee satisfaction and motivating more trust in their employer. Minimum wage is no longer relevant if employers want to build a productive, happy, and engaged workforce. Providing access to a living wage (the hourly wage that a worker must earn to afford basic needs) is necessary as employees face the financial pressures of resumed student loan payments, high gas prices, childcare costs, and return-to-work expenses.

Benefits Automation will become critical to employer success in 2024, by introducing greater efficiencies across repetitive tasks and high-touch processes. As employers work with leaner budgets, the strategic adoption of technology and benefits automation will accelerate. More business leaders are realizing the potential of artificial intelligence (AI) to enhance their overall benefits strategy, bring down costs, and boost the customer experience.

• AI chatbots can provide faster resolution of billing mistakes when errors occur.
• Decision support tools can turn stressful decisions into empowered, informed choices for employees.
• Navigation software can help employees feel more confident making critical benefit decisions in specific use cases like care management, benefits utilization, and more.
• API adoption can keep benefits data clean, organized, synchronized, and accessible.
• Increased systems integration and benefits digitization can streamline administrative workflows, help employees make informed decisions, and decrease costs.

Nontraditional Voluntary Benefits can help employers who can’t cover the cost of their employee premiums and want to expand their benefit offerings. Employers don’t have to pay for them, and employees find them valuable because they can choose the benefits that best fit their lifestyle. Voluntary benefits that align with employee expectations and can be solely paid by the employee include:

• Enhanced Medical Coverage
• Homeowner Assistance
• Flexible Paid Time Off
• Eldercare Assistance
• Financial Counseling
• Stress Management Services
• Critical Illness or Cancer Insurance
• Tax Preparation Services
• Accident Insurance
• Employee Discount Programs
• Identity Theft Protection

Primary & Preventive Care are a must if employers want to improve employee health outcomes and mitigate rising healthcare costs. Record-high inflation and skyrocketing health care costs have prevented numerous employees from seeking necessary care for fear of incurring medical debt. But avoiding care can worsen long-term health outcomes and increase costs for both employers and employees by preventing the early detection of chronic diseases (including cancer, which is the number one driver of healthcare costs).

• Employers can better support primary care by expanding health care access with innovations such as onsite clinics, virtual care, or a navigation/advocacy service that can proactively steer employees toward quality care.
• Employers should ensure that immunizations, seeing a primary care physician, cancer screenings, blood pressure, diabetes, and cholesterol tests are free and encouraged so there are no financial barriers to preventive care. Investing in more virtual health opportunities, advanced screening measures, and full coverage of recommended prevention services will be critical to employees.