Top Employee Benefit Trends for 2025

Top Employee Benefit Trends for 2025

Employee benefits are the indirect and non-cash compensation paid to an employee. These benefits are given to employees over their salaries and wages.  As we look ahead to 2025, companies are increasingly exploring innovative solutions to address the evolving needs of their workforce. Driven by shifts in work environments, economic challenges, and technological progress, the following trends are becoming key elements of a competitive employee benefits package.

Mental Health Support

With nearly 60 million Americans currently facing some form of mental illness, prioritizing mental health has shifted from being a luxury to a critical necessity for fostering a high-performing, supportive workplace. Mental health services and policies that allow mental health days have become more common as the impact of mental well-being on overall health and productivity becomes increasingly recognized.

Employees are placing greater value on employers who prioritize mental health, seeing it as a sign of commitment to their well-being. This not only helps reduce stigma but also enhances employees’ ability to manage stress and prevent burnout in the workplace.

Financial Education and Debt Management

Financial stress is well-known for its negative impact on employee morale, productivity, and overall well-being. To address these challenges, employers are increasingly emphasizing financial wellness benefits for 2025.

Offering employees resources to manage debt and make informed financial decisions can greatly enhance their overall well-being while demonstrating a genuine commitment to their financial health and education. Financial wellness programs may include tools for budgeting, debt counseling, and education on key personal finance topics like homeownership and investing.

Retirement Savings

As retirement becomes a top priority for many employees, companies are placing greater emphasis on retirement savings options. In addition to the traditional 401(k) match, some employers are now offering student loan repayment matching, helping employees reduce debt while simultaneously saving for retirement. Health Savings Accounts (HSAs) are also gaining popularity as a valuable tool for retirement planning, offering tax benefits and the opportunity to save for future healthcare expenses.

Voluntary Benefits

Voluntary benefits provide a cost-effective way to offer additional value to employees. From pet insurance to identity theft protection, these benefits give employees the flexibility to select coverage that meets their individual needs, boosting overall satisfaction.

Childcare and Fertility Benefits

For employees who are starting or planning to start a family, the increasing costs of family-related services, such as childcare, adoption, or fertility treatments, can quickly become a significant financial strain. Childcare alone can account for up to 10% of a working couple’s income.

  • Paid family leave is not guaranteed by law in the U.S. but it is a highly sought-after perk. A parental leave policy – one that considers both parents and accounts for adoption and fostering in addition to childbirth – can show your employees you care about supporting their home lives.
  • Childcare assistance supports working parents facing rising costs of living. While some larger employers may offer on-site childcare, smaller businesses can show their commitment to working parents by helping to subsidize the cost of childcare through employer contributions or pre-tax deductions.
  • Fertility assistance supports employees who are going through costly infertility treatments, surrogacy, and IVF.

In an era of rapid change and shifting employee expectations, businesses must prioritize employee well-being and satisfaction through comprehensive benefits packages to remain competitive in attracting and retaining talent. By investing in flexible, customizable, and employee-focused benefits, organizations can foster a thriving work environment that not only draws top talent but also keeps them engaged and loyal for years to come.

Reducing Rising Healthcare Costs in 2025

Reducing Rising Healthcare Costs in 2025

Healthcare costs are projected to rise significantly in 2025. To mitigate these increases, consider these tips:

  • Know Your Plan: Take time to review what your health plan covers—and what it doesn’t—to avoid unexpected costs. Understand your health plan’s coverage, including deductibles, co-pays, and out-of-pocket maximums.
  • Utilize In-Network Providers: Receiving care from out-of-network providers can dramatically increase costs. Check your plan details to confirm that your provider is in-network before scheduling any appointments.
  • Budget Wisely: Plan for potential healthcare expenses throughout the year.
  • Ask Questions: Don’t hesitate to ask your doctor questions during visits. If you need care, inquire about alternative treatments or services that are both effective and more affordable.
  • Get Annual Check-Ups and Screenings: The best way to ward off many illnesses is to not them sneak up on you.
  • Take Care of Your Health: A simple way to save money on healthcare is to stay healthy.  By staying at a healthy weight, exercising regularly, and not smoking lowers your risk for health problems.
  • Consider using a Health Savings Account (HSA) or a Flexible Spending Account (FSA): Many employers offer an HSA or FSA. These are savings accounts that allow you to set aside pre-tax dollars for healthcare expenses.  This can help save you several hundred dollars per year.
  • Telehealth: Utilize telehealth services when appropriate to reduce urgent care or doctor’s visits costs.

Staying informed about your health care benefits—including the fine print—can help you save money.  By taking these steps, you can help to manage your healthcare costs and protect your financial well-being.

2025 Employee Benefits Limits: What You Need to Know

2025 Employee Benefits Limits: What You Need to Know

Many employee benefits are subject to annual dollar limits that are adjusted for inflation. For 2025, most of these limits have increased. However, some limits, such as those for dependent care Flexible Spending Accounts (FSAs) and Health Savings Account (HSA) catch-up contributions, remain unchanged.

Key Benefit Limits for 2025:

Health Savings Account (HSA) Contributions

  • Single Coverage: $4,300 (up $150 from 2024)
  • Family Coverage: $8,550 (up $250 from 2024)
  • Catch-up Contributions: $1,000

Important Considerations for Employers

Employers should ensure that their payroll systems are updated to reflect the new 2025 benefit limits. Additionally, it’s crucial to communicate these changes to employees to help them make informed decisions about their benefits.

By staying informed about the latest benefit limits, employers can help employees maximize their benefits and plan for their financial future.

Navigating Employee Benefits: A Glossary

Navigating Employee Benefits: A Glossary

Employee benefits can be a complex landscape, filled with acronyms and unfamiliar terms. In fact, more than 50% of American adults report that they don’t have a clear understanding of their health insurance.  Many people are confused because they reach adulthood without ever learning the basics of health insurance terminology.  Illiteracy about health insurance is costly to employees and employers alike.  Educating employees on common benefits lingo can help them make informed decisions and maximize their benefits.

We have created a list of the most common terms to help your employees understand and better utilize their health benefits:

  • Ancillary (or Voluntary) Benefits: Supplemental benefits not included in most traditional group health insurance plans.
  • Co-payment: An amount you pay as your share of the cost for a medical service or item, like a doctor’s visit.  Co-pays are most common for emergency room, urgent care and prescription drugs. In some cases, you may be responsible for paying a co‐pay as well as a percentage of the remaining charges.
  • Co-insurance: Your share of the cost for a covered health care service, usually calculated as a percentage (like 20%) of the allowed amount for the service. For example, if your plan has a 30% co-insurance rate, the carrier will pay 70% of the allowed amount while you pay the balance.
  • Deductible: The amount you owe for covered health care services before your health insurance or plan begins to pay.  For example, many plans require an individual to pay $1,000 in cumulative deductibles before they begin paying out.
  • Dependent Coverage: Health insurance coverage extended to the spouse and unmarried children up to age 26 who are totally or substantially reliant on their parents for support, thereby defined as “dependent children”.
  • Explanation of Benefits (EOB): Every time you use your health insurance, your health plan sends you a record called an “explanation of benefits” (EOB) or “member health statement” that explains how much you owe. The EOB also shows the total cost of care, how much your plan paid and the amount an in-¬network doctor or other healthcare professional is allowed to charge a plan member (called the “allowed amount”).
  • Formulary: A list of prescription drugs covered by a health plan that often has different tiers based on the type of covered medication. Prescription medicines listed in one tier may cost you more than those in another tier.
  • In-Network Provider: A provider who has a contract with your health insurer or plan to provide services to you at a discount. In-Network providers have contracted with the insurance carrier to accept reduced fees for services provided to plan members. Using in-network providers will cost you less money.
  • Open Enrollment: A period during which a health insurance company is required to accept applicants without regard to health history.
  • Out-of-Network Provider: A provider who doesn’t have a contract with your health insurer or plan to provide services to you at a pre-negotiated discount. You’ll pay more to see an out-of-network provider.
  • Out-of-Pocket Maximum: The limit or most you’ll pay out of your own pocket for services during your insurance plan period (usually one year).
  • Premium: The amount you pay for your health insurance or plan each month.
  • Qualifying Life Event (QLE): A change in your life that allows you to make changes to your benefits’ coverage outside of the annual open enrollment period. These changes include a change in marital status (marriage, divorce, death of spouse), a change in the number of eligible children (birth, adoption, death, aging-out), and a change in a family member’s benefits eligibility under another plan (losing a job, Medicare or Medicaid eligibility, etc.)

Understanding the terms and acronyms can feel like learning a new language, so it’s helpful to educate your employees.  With a good understanding of what some healthcare “benefits lingo” means, it will be easier to find a plan that meets the needs and budget of your company and employees!

Benefits 101: What Is a FSA?

Benefits 101: What Is a FSA?

When it comes to health insurance, there is a lot of jargon and plenty of acronyms. Many people have heard of FSAs, but may not actually know — what is a flexible spending account, exactly?

If you have an employer-sponsored health plan, a flexible spending account (FSA) is often available as part of the benefits package. There are two types of FSAs: one for health and medical expenses and another for dependent care/childcare costs. Both are designed to help you set aside money during the year for out-of-pocket expenses while enjoying tax benefits.

When you contribute to an FSA, the money is taken from your paycheck before taxes are removed and is never taxed. The Federal FSA Program estimates that those with an FSA save 30 percent on healthcare expenses on average.

How Does an FSA Work?

  • Contributions: You contribute a portion of your pre-tax salary to your FSA.  You set a contribution amount to be deducted from each paycheck, up to the federal limit, which for 2024 is $3,200.
  • Rollovers, etc.: Employers have the option of allowing employees to roll over up to $640 in 2024 or they can provide a 2 ½ month grace period during which employees can spend their remaining contributions, but they can’t offer both.
  • Reimbursement: Use your FSA funds to pay for qualified medical expenses. You typically submit receipts for reimbursement.
  • Tax Benefits: Contributions are made with pre-tax dollars, reducing your taxable income.

What Can You Spend Your FSA Money On?

  • Medical expenses: Doctor’s visits, prescriptions, dental care, vision care, and mental health services
  • Over-the-counter medications: Many OTC medications, like pain relievers and allergy medications
  • Medical equipment: Items such as crutches, wheelchairs, and diabetic supplies
  • Dependent care expenses: Childcare or elder care costs, which can include before and after school care, preschool, and adult day care.  In 2024, employees may contribute up to $5,000 if filing jointly or $2,500 if filing taxes separately.

Key Points to Remember:

  • Use-It-or-Lose-It: Generally, any unused FSA funds at the end of the year are forfeited. However, some plans offer a grace period or carryover options.
  • Contribution Limits: There are annual contribution limits for FSAs, set by the IRS.
  • Dependent Care Expenses: If you have dependent care expenses, you can use your FSA to pay for them up to a certain limit.

Is an FSA Right for You?

Opening an FSA is a great way to save money on taxes and prepare for healthcare costs.  As with other types of savings accounts, it allows you to contribute and stash away money, but in this case, that money is taken out of your paychecks in a set amount and is nontaxable. Check to see if your employer matches contributions as well.

Understanding the rules, benefits, and limitations of these accounts will allow you to maximize their value and ensure you’re making the most of this valuable employee benefit.