Versatile medical and voluntary benefits, in
addition to compensation, are helping employers retain and
MEADOWS, Ill., Aug. 2, 2022
/PRNewswire/ -- With nearly half of the 4,000+ U.S. employers
surveyed experiencing turnover of 15% or more in 2021, retention
and attraction are top priorities — and the tool employers are
using to address this issue: flexible total rewards.
Gallagher's 2022 U.S. Physical & Emotional Wellbeing
Report found that while 78% of employers are
increasing salary budgets, up 6 percentage points from last year,
they're also recognizing the importance of changing benefits to
appeal to a diverse workforce. In fact, the survey found that more
than two in five organizations (42%) now offer medical coverage to
domestic partners and about half as many (24%) extend this benefit
to part-time employees.
"Attracting employees in even the best of times can be
challenging. But in today's complex environment, employers who
leverage an array of benefits that appeal to a diverse workforce
are better positioned to attract the right person for the right job
— and keep them," said William F.
Ziebell, CEO of Gallagher's Benefits & HR Consulting
Division. "A one-size fits all total rewards package is no longer
an option. Organizations need to offer competitive compensation and
benefits that work for multigenerational employees and match their
specific lifestyle requirements."
Traditional Benefits Align with Preferences that Strengthen
To meet the diversity of their
employees' needs, more employers are expanding health benefit
- Nearly half of employers (46%) now cover infertility services
or fertility treatments.
- Fertility medications are the most common (77%), followed by a
reproductive endocrinologist or infertility specialist evaluation
(69%). Less popular benefits include surgery or intrauterine
insemination (43% each) or cryopreservation (23%), which is the
process of freezing eggs, sperm or embryos.
- Applied behavior analysis, a type of interpersonal therapy
where a child works one-on-one with a practitioner, is the top
elective service employers offered in 2022 (55%), up 4 points
compared to the previous year. This indicates an increased
awareness of the need for stronger mental health and emotional
wellbeing support for employees and dependents.
- Autism spectrum disorder treatment is covered by 45% of
employers, up 3 points from 2021.
- Bariatric surgery (49%) is up 2 points from the prior
- Gender reassignment surgery (25%) and transgender-inclusive
benefits other than surgery (22%) each registered an uptick of 2
- Gene therapy services (14%) gained 4 points.
A larger choice of health plans gives employees an opportunity
to find a better match for their unique coverage criteria.
- Among the 77% of employers that offer more than one plan, most
provide two (35%) while the rest expand the selection to three
(26%) or at least four (16%).
- Preferred provider organization/point of service plans are the
most frequently offered (83%). However, the number of employers
that pair a consumer-directed health plan (CDHP) with a health
savings account (HSA) continues to rise, now 51%, an increase of 5
points from 2021.
- A CDHP+HSA is also slowly growing annually as the top choice
from an enrollment perspective, up 4 points since 2020. Individual
plans usually have a deductible of $2,800 with an out-of-pocket maximum of
$4,350. For family plans, the median
deductible is $5,400 with an
out-of-pocket maximum of $8,000.
Typical annual employer contributions to the HSA are $500–$599 for
individual plans (23%) and at least $2,000 for family plans (22%).
Competitive pressures in the labor market have caused employers
to hesitate when considering plan design changes that pass along
cost increases to employees.
- Half of employers (50%) refrained from making any employee
cost-sharing increases in 2022, which is slightly higher than each
of the preceding three years.
- Among those increasing employee costs, health plan premiums
were the most common target (44%), outpacing deductibles (13%) and
out-of-pocket maximums (11%).
- The median health plan premium increase was 4%-4.9% at the most
recent renewal. However, a notable 25% reported increases of less
than 1%. Eighteen percent (18%) had premium increases of 10% or
Voluntary Benefits Also Address Employees' Diverse
A quarter of employers enhanced the voluntary or
supplemental aspects of total rewards to boost recruitment and
- Accident (67%) and critical illness (61%) insurance
consistently rank as top options. Meanwhile nearly half of
employers provide permanent life (46%), hospital indemnity (45%) or
cancer care (43%) insurance.
- Employee perks or discount programs are offered by 44% of
organizations, legal services by 37%, identity theft protection by
35% and employee purchase programs by 29%.
- Looking ahead to 2024, traditional healthcare options such as
critical illness (16%), long-term care (16%) and hospital indemnity
(14%) coverage are slated for additional investment. Thirty-one
percent (31%) plan to add pet insurance, a decision that reflects
not only increased veterinary care costs but also the importance of
pets to their owners.
"The cumulative changes of the past two years, compounded by
current concerns around inflation, continue to take a toll on
employees' physical and emotional wellbeing," said Ziebell. "Our
findings confirm that organizations are evolving their approach to
traditional and voluntary benefits to ensure that they strongly
support the health needs of their employees. This also helps
optimize employee's engagement and performance, maximizes retention
and provides organizations with a competitive advantage."
Gallagher's 2022 U.S. Physical & Emotional
Wellbeing Report is part of the Workplace Trends Report Series.
It's based on data from the 2022 Benefits Strategy &
Benchmarking Survey, collected from more than 4,000 employers in
the U.S. across a wide variety of industries from December 2021 to March 2022.The report can be
J. Gallagher & Co. (NYSE:AJG), a global insurance
brokerage, risk management and consulting services firm, is
headquartered in Rolling Meadows,
Illinois. Gallagher provides these services in approximately
130 countries around the world through its owned operations and a
network of correspondent brokers and consultants.
Mary Schwartz, Gallagher
View original content to download