Do You Have the Right Benefits Lined Up to Offer to Your Employees?

Employer-sponsored health insurance continues to be a critical benefit for employee retention and satisfaction, but in 2025 it comes with an increasingly high-price tag for businesses.

According to the KFF 2024 Employer Health Benefits Survey, the annual premium for family coverage now stands at $25,572 – rising 7 percent for the second consecutive year.

“Employers are shelling out the equivalent of buying an economy car for every worker every year to pay for family coverage,” KFF President and CEO Drew Altman said. “In the tight labor market in recent years, they have not been able to continue offloading costs onto workers who are already struggling with health care bills.”

While family premiums for employer coverage have increased 24 percent since 2019, employees have only seen their share increase by just 5 percent or less than $300 with employers bearing the brunt of the cost, contributing an average of $19,276 towards family coverage, while employees contribute $6,296.

“This stark reality highlights the critical role that insurance brokers play in helping businesses navigate this increasingly complex world of employee benefits,” says Kyle Dean, President and CEO of Dean & Draper. “As costs continue to rise, it's more important than ever for companies to work with experienced professionals to ensure that their employee insurance not only meets the needs of their workforce but also remains cost-effective and makes business sense.”

The Importance of Strategic Benefits Planning

For businesses, especially small and medium-sized enterprises, the rising cost of health insurance presents a significant challenge.

It's crucial to strike a balance between providing comprehensive coverage and managing expenses. This is where the expertise of insurance brokers becomes invaluable.

Insurance brokers can help businesses:

• Analyze Cost-Effective Options: By comparing various plans and providers, brokers can identify solutions that offer the best value for both the employer and employees.
• Customize Benefits Packages: Every workforce has unique needs. Brokers can help design tailored packages that address specific employee requirements while staying within budget constraints.
• Explore Alternative Funding Models: From high-deductible health plans (HDHPs) paired with Health Savings Accounts (HSAs) to level-funded plans, brokers can introduce innovative solutions to manage costs.
• Navigate Compliance Issues: With ever-changing healthcare regulations, brokers ensure that businesses remain compliant while optimizing their benefits offerings.
• Implement Wellness Programs: Brokers can suggest and help implement wellness initiatives that may lead to healthier employees and potentially lower insurance costs in the long run.

By partnering with an experienced insurance broker, businesses can develop a strategic approach to employee benefits that not only attracts and retains top talent but also aligns with their financial goals.

This comes at a time when employees are expecting even more financial contributions from employers.

The Shifting Landscape of Employee Benefits

Recent studies highlight the evolving preferences of the modern workforce. According to the 2024 EBRI Workplace Wellness Survey, over 4 in 10 are extremely or very satisfied with the employee benefits package offered by their employer, leaving a lot of room for employer improvement.

“Top improvements to benefits plans would be larger employer contributions and more financial well-being benefits,” concluded the survey.

When asked which of the following would be the most valuable improvement to your employee benefits programs and offerings, those survey said:

• Greater financial contribution from your employer: 51 percent.
• More benefits/resources to help with your financial well-being: 32 percent.
• More flexibility: more choice/more benefits to choose from: 31 percent.
• Ability to use paid time off to ‘buy’ other benefits: 31 percent.
• More benefits/resources to help with your physical well-being/health: 25 percent.
• More benefits/resources to help with your emotional well-being/mental health: 24 percent.
• More personalized help or guidance in selecting benefits: 21 percent.
• More help/guidance in selecting the right benefits for you: 21 percent.
• More benefits/resources to help with caregiving (for children and/or adults): 19 percent.
• More simplicity: fewer choices/fewer options to choose from: 13 percent.

Quality Health Care Coverage is an Employee Priority

The 2024 EBRI Workplace Wellness Survey found that health insurance continues to be a priority, trailing only work-life balance and flexibility in work schedule in what they value most from an employer aside from income and compensation.

The changes from 2022 to 2024:

• Work-life balance rose in importance from 36 percent to 56 percent.
• Flexibility in work schedule: 41 percent to 48 percent.
• Quality health care coverage: 33 percent to 37 percent.
• Generous paid time off benefits: 32 percent to 36 percent.
• Flexibility in work location: 26 percent to 28 percent.
• Quality retirement savings benefits: Fell from 28 percent to 27 percent.
• Opportunities for career advancement: Fell from 25 percent to 24 percent.
• Comprehensive voluntary insurance benefits: Fell from 19 percent to 17 percent.
• Help with emergency savings: Fell from 11 percent to 9 percent.
• Ability to give back/volunteer through your job: Fell 10 percent to 7 percent.

For those surveyed, 83 percent were offered employer health insurance, the highest benefit offered followed by retirement savings plan (79 percent), dental insurance (75 percent), vision insurance (72 percent), life insurance (62 percent), short-term disability (60 percent), health savings account (55 percent), and long-term disability (54 percent).

Less than half of employers offered health wellness programs (45 percent), flexible spending accounts (45 percent), accident, critical illness or cancer insurance (40 percent), long-term care insurance (36 percent), traditional pension, defined benefit, or cash balance plan (35 percent), supplemental health insurance for workers (35 percent), stock options (20 percent), and emergency savings account (15 percent).

The Business Case for Comprehensive Employee Insurance

The implementation of comprehensive employee insurance offers significant advantages for both employers and employees, creating a strong business case for its adoption.

Health care trade association AHIP says that employer-provided health plans generate major ROI (47 percent) for companies and employees alike.

“That ROI came in the form of increased recruitment and retention, better employee productivity, reductions in medical costs and disability claims, and tax benefits. That ROI is expected to jump to 52% by 2026, according to estimates from Avalere,” said AHIP. “Employers should see a return of $346.6 billion in 2026, including $108 billion in direct medical cost reductions, and $139.70 billion in tax benefits according to Avalere.”

The business case for comprehensive employee insurance includes:

• Attracting and retaining talent.
• Improved employee health and productivity.
• Financial security for employees.
• Tax advantages for employees and employers.
• Competitive edge in the market.

As healthcare costs continue to rise, the value of employer-provided comprehensive insurance is likely to become even more significant in the coming years.

Best Practices for Choosing the Right Insurance

Selecting the right insurance options for your workforce can be challenging. Here are some best practices to consider:

• Understand Your Budget: Determine how much you can allocate to employee benefits while maintaining your business's financial health.
• Know Your Workforce: Conduct surveys or focus groups to understand the diverse needs of your employees across different demographics.
• Stay Informed on Legal Requirements: Keep up to date with regulatory changes, such as potential modifications to the Affordable Care Act, to ensure compliance.
• Prioritize Communication and Education: Invest in clear, comprehensive communication about available benefits and provide resources to help employees make informed decisions.
• Regularly Review and Update: Periodically assess your benefits package to ensure it remains competitive and relevant in the evolving marketplace.

Let Dean & Draper help you navigate the complex world of insurance options. Contact us today to schedule a consultation to find a customized benefits solution that meets your employees’ needs while aligning with your business goals.