Doctors in a hospital
Employers are increasingly moving beyond traditional benefits amid rising health costs. Personalizing benefits through a holistic wellbeing approach that encompasses physical, emotional, career and financial health is key to increasing employee engagement, according to Gallagher's 2025 U.S. Benefits Benchmarks Report.
"We are at a pivotal moment as employers and organizational leaders—a moment where we can have a significant opportunity to reimagine the employee care experience,” said John Tournet, U.S. CEO of Gallagher’s Benefits and HR Consulting division. “To compete for talent, reinvesting benefit savings where it may matter most to employees can make a difference.”
Healthcare benefits remain a top priority for employees and employers alike, with access to affordable, quality healthcare and prescription drugs considered essential for maintaining an engaged and productive workforce. This can be challenging, however, as employers face increasingly high costs for medical services and specialty drugs. Gallagher’s study found that 31% of employers have enhanced medical benefits to support recruitment and retention this year, but only 12% are focused on improving pharmacy benefits.
Adjusting medical and prescription drug plan designs is the most common way employers try to manage expenses, but switching plan carriers and conducting eligibility and claims audits are strategies worth considering, said Gallagher. About one-third of employees said they are moving pharmacy benefits to a pharmacy benefit manager, an increase of 13 points from last year.
Another way employers can enhance their employee benefit packages is with specialized coverage options, including hearing aids and autism therapy and treatments. In addition, nearly half of employers indicated they cover bariatric surgery for eligible plan members, according to the study.
Many employers are offering reproductive health benefits, including infertility services and fertility treatments, which support emotional and physical health around family formation. There has been a slight increase in rates for fertility-related coverage from last year, including for in vitro fertilization, intrauterine insemination, surgery, cryopreservation and evaluations by reproductive or infertility specialists, said the report.
Addressing financial health through voluntary benefits is a priority for two-thirds of employers, the study found. These benefits include identity theft protection, legal plans, permanent life insurance and long-term care options.
"By embracing comprehensive wellbeing strategies, employers not only support their workforce's diverse needs but also pave the way for organizational success," said Tournet. "When we invest in our people, we invest in our future."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.