Disability and leave strategies are becoming more complex, more expensive and more critical as employers seek to recruit and retain talented workers in today’s economy.
“As the legal and regulatory environment changes and employee expectations shift, employers face pressure to meet compliance requirements while offering competitive benefits,” according to the latest Disability and Leave Benchmarking Report from the Marsh McLennan Agency. The report identified three broad takeaway messages.
Year-over-year, there has been consistency in key policies and areas of concern. Since 2023, employers consistently have identified the same primary challenges in managing disability leave benefits. Staying compliant with state and local leave laws remains the top concern for employers for a third consecutive year. The percentage of employers ranking compliance as their top issue increased from 39% to 45% between 2024 and 2025. Employers continue to offer fully insured and self-insured short-term disability plans at similar rates year-over-year.
Caregiver leave is (slowly) expanding to meet employees’ needs. Despite growing awareness of caregiver responsibilities, most organizations don’t offer caregiver leave beyond what state or local laws require, even for immediate family members. In 2025, 35% of employers included caregiver leave for immediate family members in their benefits, while only 16% extended this support to other family members or loved ones. However, year-over-year data from 2023 to 2025 show that when employers offer caregiver leave, they’re more likely to expand who qualifies.
“Secondary caregiver” bonding coverage could pose legal risks for employers. Although more organizations are expressing concern about compliance, nearly half of those surveyed may face legal consequences for maintaining separate policies for “primary” and “secondary” caregivers. Although these distinctions are intended to be made regardless of an employee’s gender, in practice, “primary” caregivers tend to be women and “secondary” caregivers tend to be men. Employers can maintain this approach, but it should be reframed to align with federal guidance. For example, employers might use pregnancy disability benefits to offer additional leave for birthing parents through plans that don’t differentiate between “primary” and “secondary” caregivers.
As a result of these trends, the report’s authors recommend that employers re-evaluate bonding leave structures, strengthen caregiver leave offerings, bolster internal compliance oversight and review outsourcing strategy and vendor confidence.
“The 2025 Disability and Leave Benchmarking Report highlights the increasingly complex environment in which today’s employers operate,” the report concluded. “These insights can help organizations stay compliant, boost employee satisfaction, reduce risks and improve retention. Keeping up with disability and leave trends isn’t just good practice -- it can also provide a strategic edge.”
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