As employers look to get an edge in the hyper-competitive talent landscape, many are turning to their benefits portfolios—seeking to meet new demands from employees.
A number of new benefits trends have emerged in the last few years, driven by employee expectations, said HSA Bank Chief Revenue Officer Kevin Robertson at Wednesday’s Health & Benefits Leadership Conference in Las Vegas.
In particular, employees today are craving more comprehensive wellbeing offerings—from financial health to physical health—alongside greater investment in equity.
And they want their benefits to be personalized. With five generations in the workforce today, benefits leaders need to be attuned to the wide range of benefits their employees need—research suggests Gen Z is most focused on mental health and DE&I-related benefits, while Baby Boomers are interested in gym memberships and discounted health services, for instance.
“You’re not going to be able to solve every single employee’s every last wish,” Robertson says. “That’s a fool’s errand. But if you look at the generational differences, it’s important to note that what people are seeking is different based on the needs of the demographics.”
Robertson says HSA Bank is seeing employers get creative to meet these diversifying needs in five particular areas:
Lifestyle spending accounts tops creative uses for employee benefits
This is a post-tax reimbursement account that is funded by the employer, Robertson says, noting it is entirely employer-defined and considered non-ERISA.
Employers set a budget and parameters for what they will reimburse, then simply evaluate employee claims and process reimbursement. An LSA can be used to cover expenses for everything from caregiving to home-office design to wellbeing; Robertson says employers are increasingly broadening how they use LSAs for wellbeing, extending to tuition reimbursement, mental health support and exercise equipment.
“You’re really limited by just about your imagination,” Robertson says about the potential uses of an LSA.
On the employee side, he says, an LSA can provide personalization and relevance, and has the ability to drive changes employees want to pursue; meanwhile, for employers, an LSA has few restrictions, is easy to use and is low-cost yet high-value. Even if not many employees are tapping into it, “it can still translate into value without costing a lot of hard dollars” because of the positive perception of it by employees.
Tuition reimbursement accounts
Tuition reimbursement by employers peaked around 2006 but lagged for a number of years—and is now making a comeback. The 100% employer-funded account includes a reimbursement limit of $5,250.
Employers can decide how broad or narrow to make the plan; for instance, given the current nursing shortage, an organization may offer reimbursement solely for employees pursuing a nursing degree.
Adoption assistance accounts
Robertson—the son of an adopted child and himself an adoptive parent—says the adoption process is one of the most “painful, challenging and financially” complex processes facing employees.
Offering adoption assistance—including through an adoption assistance FSA, for example, which could include reimbursements for adoption fees, attorney fees, court costs and travel expenses—is a “feel-good benefit.”
“It provides a really high, very strong impact on perception but because there’s such low utilization, you don’t have to make it expensive,” he says.
Emergency savings accounts
Defining an ESA as a “group-sold account offering emergency funding,” Robertson says there’s little difference between this type of account and a simple savings account an employee could open independently. However, in reality, many don’t.
“The number of underbanked and un-banked people in America is shocking,” he says. “And it’s not just specific to low-wagers; it’s across all income spectrums.”
An ESA allows employers to act as facilitators, opening an account and then “just pushing money from payroll” to the employee’s account.
Modernizing HSA contributions
In light of employees’ evolving benefits needs, employers are increasingly recognizing the benefits of matching contributions: They save employers money in the long-term, they improve the value of the perception of benefits, they improve employee retirement readiness, for example.
Among the most creative ways employers are modernizing their HSA contributions—with a particular eye toward equity—Robertson says, a very small number of organizations are offering income-tiered contributions, which are proportionate to an employee’s income.
While healthcare will always be table stakes, Robertson predicts HR and benefits leaders will increasingly look to these and other strategies to innovate their benefits strategies as employee expectations continue to shift.
“The idea of creativity has been pushed to the forefront because of the changing environment we’re seeing in the labor market,” Robertson says. “Medical, retirement (benefits)—those will always be at the forefront, but there are small changes and tweaks that might be able to afford you interesting ways to attract and retain talent.”