Trend Two: Investing in flexible benefits will pay off
One size does not all: To support culture, budget, and retention goals employers must offer flexible benefits.
Workplace culture and regulations will continue to evolve rapidly in 2024. With a presidential election taking place in the fall and the Secure 2.0 retirement act going into effect, conversations about the role of the workplace and regulations will continue to change. In addition, remote and distributed work is still the reality for many teams, despite pushes to return to the office. Given this reality, People teams are under pressure to meet their culture and recruiting goals while supporting a diverse range of employee needs. These can include team members working in different parts of the country, as well as at different phases of their lives and careers.
For example, older team members are maximizing their 401(k) and Health Savings Accounts before retiring, mid-career employees who are purchasing a home or building a family, and early-career employees who are focused on building skills and experiences. Financial support is important for employees at all phases of their careers, and 85% of HR leaders said that offering an employer match for a 401(k), HSA, or FSA is an effective strategy for attracting and retaining employees.
of Benefits leaders say that offering wellness benefits like Lifestyle Spending and Medical Travel Accounts are impactful for attracting and retaining employees.
of organizations offered their employees LSAs or MTAs last year.
of Benefits leaders say that offering an employer match is effective for attracting and retaining employees.
What does this mean for companies and People teams?
Companies and People teams must offer benefits that meet a range of employee needs while supporting company culture goals. Offering benefits that enable employees to select what they want to pay for, and only pay for what’s used, can help employers control costs and enable employees to decide what’s best for them.
For example, employers can consider offering Lifestyle Spending Accounts that cover a range of wellness, financial, and lifestyle needs. They can also add a Medical Travel Account to their benefits package which enables employees to access care that might not be available in their immediate area and ensures equity of access to care across a distributed team. While 85% of HR leaders found that wellness benefits like these make an impact for employee retention and attraction, as of last year only about 40% of organizations offered Lifestyle Spending or Medical Travel accounts to their employees. Due to this low adoption, employers who offer these flexible benefits can have an advantage when it comes to retention and hiring in 2024.
Action items
Add or expand a Lifestyle Spending Account program.
These employer-funded, post-tax reimbursement accounts can cover a wide variety of team member needs that are not covered by health insurance.
The most common expenses LSAs cover include mental, physical, and financial wellness, professional and skills development, travel and meals, and family planning or caretaking. Employers can set the parameters of what can be funded and only pay for what employees spend, making this a benefit that can serve a wide variety of employees.
Offer a Medical Travel Account.
If your team is distributed throughout the country, especially with team members working in rural areas, your employees may not all have access to the same level of medical care. Most major insurance companies now cover travel for medical procedures, but if yours does not, offering a Medical Travel Account shows that you are committed to equity for your employees and that all employees and their families can get access to the care and specialists they need, regardless of where they live.
Whether you offer a Medical Travel Account as an additional benefit or through your insurance company, it's important to highlight this benefit to your employees.
Add pre-tax benefits for healthcare savings and consider employer matching.
Offering a Health Savings Account alongside a High Deductible Health Plan (HDHP) can give your team members flexibility to make their health care dollars go further, while saving on health insurance. When you add an employer match not only do you drive additional FICA tax savings, but also incentivize employees to participate in their benefits.
Learn more
Benefits of employer matching
How employer matching supports employee benefits adoption and engagement.
Learn more about LSAs
Lively's guide to Lifestyle Spending Accounts answers the questions you and your employees have about these post-tax accounts.
Read the guide.
How Medical Travel Accounts work
Learn more about MTAs and how they can benefit your employees.