Among the top 2023 benefits trends: affordability and family support

When it comes to their 2023 plans for health and benefits, it seems employers are thinking about two different realities.

A hot labor market that has seen scores of employees leave their jobs for new and better opportunities has HR and benefits leaders planning to up the ante when it comes to benefits that sway workers to stay. But at the same time, employers also are aware of soaring costs and inflation concerns and are looking to make sure any benefits investments are worthwhile.

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“Employers are grappling with finding a delicate balance between what they need to do for talent attraction and retention in tight labor markets versus the challenges of the current economic environment,” says Tracy Watts, senior partner and national leader for U.S. health policy at Mercer, which recently polled 708 employers seeking insights into their 2023 plans.

The human resources consulting firm’s survey found that more than two-thirds of U.S. employers say they are looking to enhance their health and benefits offerings next year in order to attract and retain talent. Better healthcare access, more affordable medical care and increased family-friendly benefits are all on tap.

Employers are focused on improving healthcare affordability for employees, with 41% currently providing a medical plan option with a low deductible or even no deductible, and an additional 11% considering it for 2023, according to Mercer. In addition, 11% will offer free employee-only coverage—no paycheck deductions—in 2023 for at least one medical plan option, and another 11% are considering it. While free coverage historically has been relatively common among small employers (29% currently offer it), it is a newer strategy for large employers, Mercer reports.

That priority comes as healthcare costs rise as a result of inflation, which is increasing at record rates, and a number of other factors—from deferred care, missed preventive care and late diagnoses because of the pandemic, to health system consolidation, COVID-19 infections and long-haul COVID.



Also as part of the affordability equation, virtual care is now playing an increasingly central role in employers’ healthcare strategies, given its potential to replace some in-person care with lower-cost virtual services and engage employees through channels they can easily access. While traditional telemedicine services are offered more widely, the majority of survey respondents will offer virtual care solutions beyond telemedicine in 2023, with more than half of large employers (52%) offering virtual behavioral healthcare in 2023 and 40% offering a virtual primary care physician (PCP) network or service.

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Family-friendly benefits

Employers also are increasingly looking to expand their family-friendly benefits for employees in the coming months. The vast majority of surveyed employers (70%) currently are offering or planning to offer paid parental leave in 2023, and 53% are providing or planning to provide paid adoption leave. Meanwhile, nearly a third of large employers surveyed will offer benefits such as access to fertility treatment coverage and adoption and surrogacy benefits by 2023, and almost another third are considering it.

In addition, nearly one in 10 large employers (those with 5,000+ employees) say they provide on-site childcare now or will by 2023, and 22% will provide access to backup childcare services. Employers also are beginning to focus on the special needs of women in regards to reproductive health, Mercer finds, from preconception family planning to support during menopause. Across U.S. employers of all sizes, 37% of survey respondents provide at least one specialized benefit or resource to support reproductive health, which could include benefits to support high-risk pregnancies, lactation, pre-conception family planning, pregnancy loss or menopause.

In order to make the best decisions regarding health and benefits offerings for their employees, employers are increasingly taking the pulse of their workers to find out what they want. The Mercer survey finds that 61% of employers are conducting surveys on employee benefit preferences. Informed, thoughtful and data-based strategies will help employers focus on what is right for their people, culture and business, Watts says.

“Employers need to be really thoughtful and specific about their benefits enhancements to ensure they will get a return on their investment,” she says. “This requires an understanding of the values and needs of their unique workforce.”

Kathryn Mayer
Kathryn Mayer is HRE’s benefits editor and chair of the Health & Benefits Leadership Conference. She has covered benefits for the better part of a decade, and her stories have won multiple awards, including a Jesse H. Neal Award and honors from the American Society of Business Publication Editors and the National Federation of Press Women. She holds bachelor’s and master’s degrees from the University of Denver. She can be reached at kmayer@lrp.com.

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