THE OUTLOOK FOR HEALTH CARE IN 2023:

What you need to know about the forces reshaping our industry.

X

July 11, 2022

4 big ways employers are changing health benefits in 2023

Daily Briefing

    Amid the Great Resignation, roughly two-thirds of employers are looking to enhance their health benefits in an effort to improve employee recruitment and retention, according to a new survey from Mercer.

    Webinar: The evolving employer-employee compact

    Employers focus on affordability, access for 2023 health benefits

    According to Mercer's Survey on Health and Benefit Strategies for 2023, which analyzed how employers are adapting their benefit plans to meet the needs and expectations of workers, employers are focusing on affordability and access for their 2023 health benefit offerings.

    For the survey, Mercer polled 708 U.S. employers between April 26 and May 13, 2022. Respondents were polled across all industries and included companies with fewer than 500 employees (36%), 500-4,999 employees (46%), and 5,000 or more employees (18%).

    Notably, the survey found that two-thirds are planning to enhance their health benefit offerings in an effort to improve employee recruitment and retention. In particular, one in five large employers said they are placing more of an emphasis on benefits for hourly and low-wage workers, and more than half of large employers will offer virtual behavioral health care next year.

    Mercer also found that 61% of participating U.S. employers are surveying employees on their benefit preferences to help them determine what is best for their employees, culture, and business.

    "Employers are grappling with finding a delicate balance between what they need to do for talent attraction and retention in tight labor markets versus the challenges of the current economic environment," said Tracy Watts, senior partner and national leader for U.S. health policy at Mercer. "Employers need to be really thoughtful and specific about their benefits enhancements to ensure they will get a return on their investment. This requires an understanding of the values and needs of their unique workforce."

    4 key health and benefit strategies for 2023

    According to Mercer, employers are primarily focusing on four strategies in designing their 2023 health benefit offerings.

    1. Improving affordability

    More than two-fifths of surveyed large employers (41%) said they will provide a medical plan option that has a low deductible—or no deductible—and 11% said they are still considering it. Meanwhile, 11% will offer free employee-only coverage, and another 11% reported that they are still considering the offering. Historically, free coverage has been more common among small employers—with 29% currently offering it—than large ones.

    2. Focusing on hourly and low-income workers

    When Mercer asked employers whether they would tailor benefit enhancements to specific groups of employees, around one in five large employers said they are focusing on their hourly and low-wage workers.

    "In today's competitive labor market, employees are able to leave jobs for others offering only slightly higher pay. Employers are looking to create a stronger bond with this workforce by offering health and well-being benefits and resources that their employees will value," Watts said. 

    3. Addressing health disparities and benefit gaps for LGBTQ+ and under-represented workers

    Almost one-third of large employers said they plan to expand their benefits to offer fertility treatment coverage, adoption, and surrogacy benefits by 2023. Another third of large employers said they are still considering it.

    Notably, benefit gaps and disparities for workers with disabilities can often be overlooked in diversity, equity, and inclusion initiatives. For example, just 49% of respondents cover hearing aids and cochlear implants, and 48% cover body support devices and prostheses.

    To help close gaps for racial and ethnic groups, a third of respondents offer advanced search functions to help plan members find health care providers or multilingual communications.

    Twenty-seven percent of respondents offer specialized behavioral health care, and another 29% said they are considering adding this type of support. Survey respondents also voiced a strong interest in improving coverage for maternal care to help improve birth outcomes for Black mothers and babies. Currently, only 11% offer this type of coverage, and another 20% are considering adding it.

    4. Offering family-friendly benefits and supporting women's reproductive health

    According to the survey, 70% of surveyed employers are currently offering or planning to offer paid parental leave in 2023, and 53% are providing or planning to provide paid adoption leave. In addition, almost 10% of large employers said they either already provide on-site child care or will provide it by 2023. Twenty-two percent said they will provide access to back-up childcare services.

    Employers are also focusing on reproductive health—from preconception family planning to menopause support. Across all U.S. employers, 37% of survey respondents said they provide at least one type of specialized benefit or resource to support reproductive health, which could include a wide range of benefits, including support for high-risk pregnancy, lactation, preconception family planning, pregnancy loss, or menopause. (Minemyer, Fierce Healthcare, 7/7; Mercer press release, 7/6)

    Have a Question?

    x

    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.