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Every year, Gallagher, an insurance brokerage, releases a Physical & Emotional Wellbeing report as part of its Workforce Trends Report Series. Via insights from 3,552 organizations, the report is intended to compare one’s company’s absence, medical, and pharmacy benefits—along with wellbeing initiatives—with that of colleagues, and confirm that strategies line up with the market while utilizing a “comprehensive data set.”
According to Gallagher’s 2024 edition of the report,1 about half of employers in the United States (52%) have stated that they successfully manage healthcare costs, and more than two-thirds (68%) noted that the high medical service costs is their most daunting obstacle. This is reflected by the 9 in 10 employers (92%) that have faced health plan premium increases during their most recent renewal. Of those rate increases, nearly 1 in 4 (24%) of them were in the double digits.
Specialty drugs also present a healthcare cost management challenge (44%). Within the specialty drug segment, executives are considering whether the benefits of these GLP-1s—along with other weight loss medications—outweigh these high prices.
“The advantages of new treatments for obesity and excess weight are evident, but the significant cost associated with these medications cannot be ignored,” commented William F. Ziebell, CEO of Gallagher’s benefits & HR consulting division. “Employers that successfully navigate this challenge tend to take a mindful approach to their benefits design. For example, they may require an employee clear a body mass index threshold and actively participate in an employer-sponsored wellbeing program before they cover GLP-1 prescription costs. A holistic strategy, such as this, will likely result in better outcomes, as well as improved employee engagement.”
Of course, being able to eliminate the healthcare cost challenge overnight may not be possible, but employers are beginning to experiment with various methods that can help employees take advantage of their current benefits.
One way they are doing so is with options. Eighty percent of employers offer more than one medical plan to choose from, and consumer-directed health plans (CDHPs) with health savings accounts (HSAs) are considered one of the fastest growing plan types. They are currently being offered by 56% employers, up from 40% in 2020. Twenty-four percent of organizations say that a CDHP with an HSA is their most popular plan.
When it comes to stress, burnout, and overall mental health, their value cannot be understated. However, the challenge lies in ways to actually help employees in handling these challenges. In fact, 70% of employers expressed concern regarding the effect that stress and burnout have on their employees. Events take a turn when employers are asked about their impression of managers’ preparation in referring employees to mental health support services—2 in 5 (42%) believe their managers have the resources to do so. In order to address this, 22% of companies provide training for HR and managers to handle these types of scenarios, an increase from 17% in 2022.
Other notable trends in physical & emotional wellbeing include:
- Almost 1 in 2 cover infertility services or treatments
- Nearly 9 in 10 have a bereavement leave policy that is separate from their PTO policy
“It’s important for decision-makers to understand the diverse needs of their workforce and use this as a guide to create a benefits offering that will appeal to them,” added Ziebell. “Where many employers fall short is by failing to communicate when and how to use specific benefits, and their value. By ensuring that employees are well-informed and equipped with the necessary information to utilize their available benefits, employers can improve employee engagement and bolster retention.”
Reference
1. GLP-1s, Surging Medical Costs Have Employers Taking a Hard Look at the Return on Investment. Inizio Engage. July 30, 2024. Accessed July 30, 2024. https://www.prnewswire.com/news-releases/glp-1s-surging-medical-costs-have-employers-taking-a-hard-look-at-the-return-on-investment-302209513.html