How to build a benefits strategy that battles rising costs, according to Holmes Murphy

With consumer inflation and rising costs of healthcare, it's more important than ever that employers develop and maintain quality benefits that are affordable — for both themselves and their employees.  

In 2022, the average employer saw about a 5% increase in healthcare costs, according to an analysis from McKinsey. Throughout 2023, WTW has predicted that those costs will jump an additional 10%. If expenses continue to rise at an accelerated rate, over 70% of employers said they would increase employees' share of costs, according to McKinsey.  To avoid this, employers can keep a closer eye on employee's preferences and needs to mitigate unnecessary expenses. 

"As we continue to deal with the tight labor markets, there has been more focus and awareness around really doing deep dives and understanding whether or not [employers'] benefits packages are supporting their talent acquisition and retention strategies," says Brooks Deibele, enterprise sales leader of employee benefits at Holmes Murphy. 

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In addition to typical "bread-and-butter" healthcare plans, there's been a push for more financial benefits — like access to financial advisers — as well as mental health support. With many employees still reeling from the past few years of pandemic-induced stress paired with high consumer costs, people are on the lookout for resources to help them achieve stability and a work-life balance. 

Employers can leverage tech and AI innovation to their advantage. A variety of new mobile apps have come out that consolidate available medical services and insurance information, making it more accessible than ever. 

"There are digital solutions out there like Healthjoy, that are really consolidating information and benefit plans," says Deibele, referencing the benefits navigation platform that aims to simplify how employees access and engage with benefits. "They can help steer them in the right direction, and provide them with accurate information."  

Telehealth solutions can also help employers address both costs and gaps in demand — for everything from health check-ups to remote monitoring tools that help people tracking their vitals or managing chronic illnesses do so from the comfort of their own home. This is particularly helpful in driving those in need of mental health support toward appropriate care, Deibele says. 

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"Historically, people visited a brick and mortar, and a lot of people weren't ultimately comfortable with that, " he says. "Now you are able to either connect live with a behavioral therapist or in a virtual setting."

In addition to traditional therapy, Deibele also notes that peer level support groups can be another powerful resource for those in need of emotional support. Simply talking to someone who has gone through a similar experience or having a friend listen can go a long way; employers can help by facilitating these networks and integrating them in the office.  

"We're seeing more interest in services that provide peer level support," he says. "Not necessarily a licensed professional — book with somebody that is dealing with a similar situation and somebody to connect with and relate to."

While the economic future is uncertain, it's important that employers develop long-term strategies and goals for their benefit programs, not only for their employees' sake, but their own. Deibele suggests creating a three-year plan at minimum. After all, one can always pivot and re-assess their plans if necessary.

"If you're standing flat footed, not developing a long-term plan, and not making changes, it's going to be too late when things change," says Deibele. "The costs will catch up to you, and then you're going to be forced to make more dramatic changes."