Employee Benefits

For many workers, 2022 has been a year defined by opportunity and anxiety. The Great Resignation saw many employees leave their current employer in search of better opportunities elsewhere. At the same time, rising costs of living, especially in healthcare, has workers struggling to balance their work and home responsibilities. Through all this turmoil, the desire to work from home, sparked from the pandemic, remains a high priority for many employees due to its role in helping them achieve improved overall well-being.

Employers are faced with a balancing act. They want to attract and retain top workers by keeping pace with employee benefits trends. The 2022 Paychex Pulse of HR Survey reported that organizations have increased the benefits they are offering by an average of 22% compared to the year before the COVID-19 pandemic. At the same time, inflation demands that businesses assess and invest their benefit dollars carefully and get creative with meeting employee needs.

As we move into the new year, employers should familiarize themselves with employee benefits industry trends to guide their decision-making. Reviewing the emerging trends in employee benefits and responding with meaningful action can go a long way to keeping your employees happier, healthier, more productive, and loyal to your business.

What To Know About Employee Benefits Trends 2023

• Improving Healthcare Affordability
• Whole Body Health and Well-Being
• Remote/Hybrid Work Environments
• Personalized Benefits
• Family-Friendly Benefits
• Savings and Retirement
• Diversity, Equity, and Inclusion

Improving Healthcare Affordability

Of all the employee benefits trends, health benefits that improve healthcare affordability has become a staple. It's a simple concept. A healthy workforce is the foundation of productivity, creativity, and a positive work culture. Yet, the rising cost of healthcare along with finding time to get treatment during a relentless, demanding work schedule can be an obstacle for workers to seek the care they need, when they need it. Today's deferred care translates into increased claims down the road. And it's not just about treating a condition. Access to preventative care is equally important. Employers who actively make health care more affordable and accessible are sending the message that they care about their workers as people. There's another consideration. Employers who aren't offering health insurance are in the minority. Health insurance is the number one benefit offered with as many as 72% of businesses saying they offer health insurance, according to the Pulse of HR Survey.

There are several strategies that employers can use to improve healthcare affordability. In addition to a robust healthcare plan and virtual health care, providing employee health benefit accounts can maximize opportunities for employees to save on their healthcare expenses. Health benefit accounts also provide cost savings to you by helping you reduce your tax bill and control healthcare costs today and into the future.

Mental Health and Well-Being

Related to improving healthcare affordability is providing benefits that encourage improved mental health and well-being. Mental health in the workplace is an interconnected issue and is inextricably linked to physical health. According to the Centers for Disease Control (CDC), depression increases the risk for many physical health problems, especially chronic conditions like diabetes, heart disease, and stroke. The CDC also points out that the presence of chronic conditions can increase the risk of mental illness. It becomes an escalating feedback loop with dire consequences for those who are caught in it.

Even before the pandemic, employee mental health benefits trends were gaining traction. Since then, Paychex surveyed more than 1,000 workers to find out how the pandemic has affected their mental health at work. Around 51% of respondents said their mental health had worsened during the pandemic. Around one-third reported struggling to achieve their typical level of productivity due to their current state of mental health. As we move into the pandemic's prolonged aftermath, recruitment, retention, and productivity success will likely favor those employers who provide mental health benefits.

One of the current trends in employee benefits is providing services that encourage healthful behaviors such as good sleep hygiene, regular physical movement, smoking cessation, and addiction treatments. These types of benefits can go a long way in helping improve an employee's mental health and empowering them to live a happier, more fulfilling life. When workers are more emotionally, socially, and financially fit, they will be more engaged at work and contribute to an energetic, positive work environment that excels in creativity, problem-solving, and a can-do spirit. Consider offering support resources such as employee assistance programs (EAPs), comprehensive biometrics and lifestyle education programs, online resources, behavioral health education programs, and suicide awareness training for managers.

It's worth noting that mental health benefits are particularly important to Gen Z workers. A 2022 Paychex survey reveals that when asked to rank benefits (aside from higher pay), more Gen Z respondents cited mental health benefits as the top benefit that would make them stay at a company long-term.

Remote/Hybrid Work Environments

Another way employees are seeking to improve their overall health and well-being is through finding a better balance between their work and home life. The pandemic has shifted how employees show up for work and these remote or hybrid work environments continue to help them find the balance they desire.

The degree to which you support hybrid or remote work arrangements for your workers may play an important role in your ability to retain employees. In a 2022 Paychex survey, in partnership with Executive Networks, employee respondents reported that job stability and performing meaningful work were the two most important reasons for continuing to stay at their current companies. However, the type of work arrangement and even generation also play a role. According to the survey, 46% of Baby Boomers, 38% of Gen X, 31% of Millennials, and 24% of Gen Z said that flexibility in work hours and scheduling would make them more likely to stay long-term at their organization.

Implementing a remote or hybrid workplace benefits employers, too. When executed thoughtfully and successfully, you can gain access to a larger talent pool when it's time to recruit new employees, expect higher levels of productivity from employees, and save money in everything from overhead costs to fewer sick days.

Personalized Benefits

Depending on your workforce, a one-size-fits-all benefits package may not yield the value for your employees that you are hoping to provide. As employees place higher priority on benefits (aside from pay), they will gravitate to those employers who are actively seeking ways to meet their needs. Personalized benefits is one way to give your employees a choice in constructing a customized benefits package.

One strategy might be to offer an array of voluntary benefits, which are goods or services that are either fully or partially paid for by the employee, but at a group discounted rate made available by the employer. Examples typically include ancillary benefits that fall outside of traditional benefits packages such as ID theft protection, financial counseling, healthy lifestyle programs, public transportation passes, and supplemental insurance packages such as life, cancer, and even pet coverage. Employers then provide a monthly or annual expense allowance that employees use to offset their costs for these voluntary benefits. You can even set up a reimbursement plan to help with medical expenses, remote work costs, or other perks that support your workers.

Family-Friendly Benefits

Between daycare, healthcare, and enrichment programs, the costs of raising a child or caring for an elderly dependent represent a huge financial burden. Add to this the reality that many parents are working full-time, and the result is workers who are burned out, stressed out, and exhausted. Employers are recognizing that expanding family-friendly benefits beyond what is required by federal law is an important trend that safeguards the physical and mental health of their workers.

Paid parental leave, paid adoption leave, and surrogacy benefits are ways employers are extending family-friendly benefits. A dependent care flexible spending account (DCFSA) can help ease the burden of daycare or other ancillary care costs. Specialized benefits that support women's reproductive health in everything from family planning to high-risk pregnancies to menopause is also gaining traction.

Savings and Retirement

Monetary concerns continue to headline employee benefits trends of 2023. Financial security, or lack of it, certainly contributed to the anxiety many Americans experienced during the pandemic and its continued ripple effect through the economy. As a result, prioritizing financial goals to improve financial wellness continues to receive much-needed attention from workers and their employers. It's a serious issue.

Financial wellness programs can play an important role in employee retention strategies, according to a September 2021 report by the Society for Human Resource Management (SHRM) and Morgan Stanley. Helping build savings for emergency funds, debt repayment, and retirement are critical elements to a competitive financial wellness program.

Diversity, Equity, and Inclusion (DEI) Efforts

While not a direct benefit in the traditional sense, today's diverse workforce will naturally gravitate to those organizations that are taking thoughtful actions toward creating an inclusive and equitable work environment. And why wouldn't they? A company that prioritizes DEI provides a work environment that feels safe for sharing ideas and expressing creativity along with a greater opportunity to gain access to training, mentorship, and upward career growth.

Establishing a work structure that organizes itself around DEI is beneficial. Employers who fail to recognize DEI as one of the future trends in employee benefits risk losing talented new hires who could bring valuable and much-needed alternative perspectives and ideas to the business. There are tangible steps you can take within your business to demonstrate your commitment to DEI practices. These include vetting your recruitment and hiring strategies, providing DEI training classes for management, and providing holidays, benefits, and acknowledgments that support different sexual orientations, religious and cultural backgrounds, and marginalized communities.

Offer Your Employees the Benefits They Want in 2023

As employers struggle to hire and retain employees, a strong and strategic benefits package can play a key role in your business's success and help set you apart from the competition. Staying abreast of new trends in employee benefits ensures you're investing in benefits that your employees will find useful in improving their personal and professional lives. As a trusted HR provider, Paychex can help you put together an ideal package as well as provide ongoing, easy-to-use support that benefits you, your employees, and your business.

Stress, both in and out of the workplace, is a fact of life for many employees and business owners. In fact, more than one in four business and HR leaders (26%) said they are extremely or very stressed, and this increased to 35% of leaders feeling stressed at companies with 250 to 500 employees.¹

There are things you can do to help alleviate some of the burdens of competing priorities and other stressors. In the long run, providing employee resources can go a long way in demonstrating how much you value your workforce.

An EAP, which stands for employee assistance program, is one example of how you can help employees resolve a variety of issues that contribute to stress, which in turn may be adversely affecting their work performance and morale. EAPs may help improve engagement and productivity, and even reduce absenteeism and turnover. Here's a closer look at why you may want to consider an EAP as part of your benefits lineup.

What Is an EAP?

An EAP provides a confidential source that employees can use to find support and resources for certain challenges they face. The service is usually provided as part of a larger benefits package and connects employees to assessments, short-term counseling, referrals, and follow-up services. Depending on the situation, employees can access certain services from the safety and privacy of their own home.

What Does an Employee Assistance Program Do & Why Is It Important?

Employee assistance programs are designed to connect employees with the best resources for handling personal challenges that can impact their ability to manage stress and remain productive while at work. EAPs can suggest resources that help with many needs from mental health counseling to personal service discounts on babysitting or insurance.

EAPs have trained representatives that can evaluate the needs of the employee and connect them to the best resource to help with that need. Whether it's recommending a counselor or providing a list of local photographers to lessen the stress of planning an upcoming wedding, the representatives that work with EAPs can quickly and efficiently go to work for your employees.

What Does EAP Coverage Include?

While the details of an individual program are identified in the plan documents, many EAPs provide critical support for serious issues. Some of the issues and services often included in an EAP are (but aren't limited to):

• Mental health programs: Anxiety, depression, grief, crisis intervention, and behavioral health issues such as addiction or eating disorders are some examples of issues supported through these programs.
• Health and caregiving: In addition to managing their own health (e.g. establishing a fitness plan, getting nutrition guidance, or coping with chronic diseases such as diabetes, heart disease, or hypertension), employees may be faced with additional challenges like being the caregiver for a loved one. Through an EAP, employees can get help locating eldercare or daycare services, nursing homes, or even tracking down an in-network physician for a child going to school out-of-state.
• Family services: All families can benefit from support in one way or another. Help is available with EAP marriage counseling services, family planning, child safety, physical or emotional abuse, and mediation.
• Counseling referrals: One of the overarching benefits of an employee assistance program is having readily available, confidential support from qualified professionals for personal, family, and work-related issues. Counseling services can include assessments, remote short-term support, or referrals.
• Substance abuse: Chemical dependency, addiction, alcoholism, gambling, and crisis intervention are a few examples where support from a qualified professional through the EAP can make a positive and potentially life-saving impact in an employee's life.
• Financial services: EAP services can connect employees with help to improve financial wellness — budgeting advice, achieving healthy spending habits, loan consolidation, debt repayment, setting up an emergency fund, and more.
• Work issues: Navigating a career change, establishing a plan for professional development, managing workplace stress and responsibilities, making travel plans, or managing relationships with coworkers are all examples of how an EAP can help employees with work-related issues and help prevent or overcome burnout.

How Does an Employee Assistance Program Work?

The specific offerings of an EAP vary depending on the plan documents of the program. However, an EAP typically covers your employees and could also cover eligible household members, including a spouse, domestic partner, children, or other dependents. EAPs often maintain a network of partners who can help meet a range of needs, such as legal firms, childcare professionals, elder care specialists, nutritionists, fitness experts, and more. With an EAP, your employees and their qualified household members have access to a confidential resource they can call when crises or general life management questions arise.

The range of services may vary from on-call counselors and referrals to local resources that can help them solve their challenges. Members can also access a virtual library of free resources and online self-help tools. Access to care counselors is available 24/7, and all communications are personal and confidential.

An EAP is not health insurance. However, a combination of a health insurance plan and an EAP could be useful to your organization and appreciated by employees.

Benefits of an EAP

When life's challenges outpace your employees' ability to cope, it can negatively impact both their performance and productivity. Having adequate support can help employees manage stress and solve problems, which may reduce the negative impact on the company's bottom line and overall morale.

Stress Management

Employees nationwide are currently dealing with stress: whether it's the ongoing impact of the pandemic, working at home and contending with work/life balance, are dealing with health issues, need to take care of kids, or are working long hours. In the 2022 Paychex Pulse of HR Survey, 60% of HR leaders said they were concerned about employee burnout, an 18% increase from before the pandemic. Your staff can leverage an employee assistance program to support employees in keeping stress levels under control, even during these challenging times.

Decreased Absenteeism

Absenteeism and stress are closely related. When you layer this on top of the numerous issues that may already be keeping employees from work — being caregivers or getting sick themselves — absenteeism can become a serious issue. An EAP can help an employee find the resources that can help save them time and mitigate unhealthy stress levels. Having these tools on hand can have positive impacts, such as improved time management and more energy throughout the workday.

Reduced Accidents and Fewer Workers' Comp Claims

When employees have readily available access to resources that improve their health, manage their problems, and reduce stress, their overall wellness can improve. Stress management can help employees be more productive, as well as work smarter and safer, especially those who are involved in various forms of physical labor. Investing in an EAP may likely reduce accidents and could ultimately lower your workers' compensation claims.

Affordable Resources

For many employers, providing healthcare coverage is one of the more costly components of a benefits package. A healthcare assistance service like an EAP can help manage that cost over the long-term by helping provide the advice, support, and resources employees need to be physically and mentally healthier, thus lowering their health care claims over the long-term. Additionally, an EAP can help employees be more efficient in managing their healthcare expenses.

Greater Employee Retention

Employees who are engaged and satisfied with their work tend to stick around longer. Not only can access to an EAP empower employees to lead healthier, more fulfilling lives but offering an EAP as a benefit demonstrates that you care about their overall well-being, which can increase feelings of loyalty to your organization. Roughly half of companies with 10 to 500 employees expect that hiring quality staff will be more challenging in the next 12 months.¹ Offering benefits like an EAP can really set your company apart.

Likewise, feeling stressed or overworked, an inability to achieve sufficient work/life balance, and not having access to resources are some of the reasons why employees choose to leave a job. An EAP, with its network of resources, functions to help employees better manage feelings and situations. When you consider the true cost of losing an employee (impact on morale, productivity loss, cost of recruiting, hiring, and onboarding a new person), investing in an EAP to help support your retention efforts makes a lot of sense.

Other EAP Benefits to Employers

There are additional benefits of an employee assistance program for employers. In certain cases, EAPs can directly help a company resolve ongoing issues. Each program's offerings are different, but certain programs will provide consultations to managers or executives on how to handle difficult situations within the workplace. For example, an EAP can be used as a resource during employer/employee interactions. If a worker is experiencing performance issues or discloses personal problems to an employer, a referral to an EAP resource may be appropriate. However, it's important to evaluate this from a policy standpoint and obtain expert HR or legal advice to ensure the strategy you're considering complies with relevant state and federal regulations.

An EAP can also help a business meet employees' needs while staying within its budget. Many employees and potential job candidates want a variety of benefits, and an EAP is one way a smaller organization can remain competitive for top talent and retain valued staff once hired. It may be a good time to audit your employee benefits package to determine whether an EAP would benefit your organization.

How Much Does an Employee Assistance Program Cost?

When added to a larger employee benefits package, EAPs can come at a very reasonable cost to employers. While the exact figure will vary across providers and service offerings, many EAP add-ons cost between 75 cents and $2 per member per month, according to the Society for Human Resource Management.

The exact costs will vary based on:

• The number of employees covered
• The number of services offered
• Frequency of use
• Chosen EAP provider

What Are the Steps for Launching a Successful EAP?

The most important step for launching a successful employee assistance program is identifying which services are needed by your employees. To that end, employers looking to add an EAP to their existing benefits package should take the following steps.

1. Gather Employee Feedback

Your employees may be willing to share what they need most, especially if they understand that the information is to be used to help you improve company benefits offerings.

2. Explore Provider Offerings

There are numerous EAP providers, each with their own unique plans and offering sets. By comparing several providers, you can start to narrow the field and identify which providers align with the services and benefits sought by your employees.

3. Compare the Numbers

Each plan will have its own limitations on number of covered employees, number of services offered, and how often employees can access the service. By comparing these figures, you can calculate a rough annual cost to your organization.

4. Integration With Your Existing Benefits Plan

Once you have chosen a plan, work with your EAP provider to seamlessly integrate this service into your existing benefits package.

How To Adopt an EAP at Your Business

Challenging situations, from stress on the job to navigating an emergency, can take a toll on individuals. Help your staff get the support they need by investing in an employee assistance program. Ready to get started? An EAP is included as part of all Paychex HR Services offerings, and clients can get started by contacting their dedicated HR professional. If you're evaluating your benefits plan on a broader scale or looking to switch providers, consider how Paychex can help you attract and keep an engaged and productive workforce.

Learn how a mentally healthy workplace is good for business and take steps today to improve the mental health of your employees. For additional resources, check out our mental health resource page.

¹2023 Priorities for Business Leaders, Paychex

Having a strong partnership with a licensed benefits broker can be good for your company and your employees. Brokers can leverage their relationships with carriers to help you maximize coverage options and find solutions you may not be able to find on your own. In many cases, they hold the keys to simplifying online enrollment as well as access to real-time program reporting. What’s more, they are available to help you stay compliant with state and federal requirements regarding benefits programs and offerings.

What is a Benefits Broker?

A benefits broker is a professional who provides benefits advice, products and services, and guidance to employers and employees. Employers will use brokers to help them narrow down offerings by providing input and expertise on the matter. Some brokers may work for a health insurance carrier rand may encourage you to choose plans from that carrier. Others may not be tied to a carrier but specialize in one type of benefit. Others may have a larger base of benefit options for employers to consider.

Why Do You Need a Benefits Broker?

As independent professionals, brokers are the bridge between your organization and the vast healthcare industry. Ideally, your broker will work with you to evaluate major insurance carriers, structure a plan, communicate on your behalf, and explain the many nuances to your employees.

Brokers can also play a critical role when it comes to helping your employees become well-informed healthcare consumers. If you want this result, then you want a broker who can readily provide:

• Information and guidance when choosing insurance, including health, life, disability, dental, vision, and more. Remember that not every broker offers the full range of insurance options.
• Compliance information in regard to the Affordable Care Act (ACA) and any other relevant regulations that could impact benefits.
• Advice on how to minimize total costs, including how to reduce total premiums.
• Assistance with employee communications related to open enrollment and understanding their benefits options.
• Help resolving benefits issues, acting as a go-between for the employer and carrier to help resolve any problems with claims.
• Analysis of your existing benefits and claims, including advice on future plan changes and areas for potential cost savings.
• Advice on changes to benefit packages based on employee demographics, previous utilization rates, and pricing models.
• Direct assistance to employees who have benefits, coverage, or claims questions.
• Education for employees with learning tools and resources to help them make the best-informed decisions during open enrollment about their healthcare options.

Choosing a Benefits Broker

Many organizations pick their benefits broker based on their experience working with other organizations that are similar to theirs. They might look at factors such as:

• The size of organizations a broker supports
• Different industries these businesses are in
• The lifestyle needs and choices of other employee populations, compared with their own

While these considerations are valuable, they only scratch the surface when it comes to selecting a broker. Ideally, your broker also has the ability to form a deep professional understanding of your goals, and what you want to achieve on account of your benefit plans.

And since goals vary quite a bit, you want your broker to be an adept listener who can pivot services toward finding solutions that make a difference.

What Does a Strong Employer/Broker Relationship Look Like?

HR must juggle multiple responsibilities every day. That includes benefits administration, which can make it difficult to be proactive about benefits. A strong employer/broker relationship, along with effective benefits administration, can be the key to getting more out of your benefits.

A strong broker relationship can bring much-needed support to your employees, your organization, and your own workload. However, optimizing benefits with the help of a broker is about much more than just shopping for coverage from different carriers.

For starters, it involves working with a broker who takes a well-rounded approach to how you strategize, budget, and design your benefits plan. Therefore, if your broker only helps you shop for plans and is largely unavailable the rest of the year, you might not be reaping the full benefits of your partnership.

Tips to Evaluate Your Broker

The following tips can help you examine the strength of your current broker relationship and set the stage for finding a new broker. It’s a good idea to conduct the broker selection process as far in advance of your plan renewal date as possible.

Identify the Skills You Need in Your Broker

Employers don’t select brokers very often. Therefore, it’s easy to stay on top of the latest skills, tools, and capabilities that modern benefits brokers possess. However, in today’s healthcare reality, ignorance about brokers is not an option. Your broker should be laser-focused on meeting your business’s and employees’ needs.

Also consider the fact that your broker might be responsible for helping you manage a budget that makes up nearly 30% of your total compensation costs, according to the U.S. Bureau of Labor Statistics. You should feel the utmost confidence in their capabilities when choosing and evaluating your broker.

Be Open to Shopping Around

Changing relationships can be difficult. However, if your current broker is unable to bring you the results you need, shopping around may be the way to go.

When it’s time to compare, it can be difficult to measure how brokers differ. In fact, it’s not always easy to see a difference that will drive you to change brokers. To compare brokers, first look beyond premiums. After all, you may need your broker to be heavily involved in enhancing the employee experience.

Ask for Direct Referrals from People and Organizations You Trust

Be sure to check licenses and professional registrations. You may even search disciplinary records via the insurance commissioner’s consumer hotline in your state.

Talk to colleagues in other organizations about their benefits broker as well. Whose professional reputation rises to the top?

Ask About Network Reach

Find out about your potential broker’s area of focus. Some brokers focus on specific products that may or may not meet your needs. Consider the breadth of the networks they have access to. When you do, make sure these align with the needs and expectations of your employees.

Pay Attention to Other Ways Your Broker Can Help Support Employees

The way you handle benefits communication can affect employee morale, and spur enthusiasm for your benefits program. Your broker can play a major role in helping you execute your benefits communications strategy.

As your broker helps you sort through different plans, they can include employees in the process. This type of back-and-forth can involve open, ongoing communication, interviews with employees, surveys, group meetings, and more.

Your broker can also play a role when it’s time to communicate benefits changes. As an industry professional, they can help reassure employees, and even empower them as time gets closer to open enrollment.

When more employees engage in your benefits program, it can help generate a positive return on a very large investment. Your broker can be a big help when it comes to creating confidence in your benefits program.

Get a Broker That Supports Your Business and Employees at Every Step

Don’t settle for a broker relationship that falls short of expectations, especially when it comes to managing costs, simplifying communications, and maximizing the benefits experience.

Know that true levels of services and professionalism will always vary from one insurance professional to another. However, as you consider your broker relationship, the general rule of thumb is to make sure you and your people are getting the support you need on every level — including costs, support, enrollment, communication, and benefits workflow.

When it’s time to hire a new broker, how well you prepare and understand what you’re looking for can make all the difference. Having the right benefits tools, such as benefits administration software, can also help you and your organization stay ahead.