One way employers can do that is through a points-based wellness program, which rewards employees with lower payroll deductions for health insurance when they attend health screenings, keep up with vaccinations and take steps to improve their health.

How the programs work

With these programs, employers work with a wellness plan administrator to establish a menu of eligible activities, assign point values and set a threshold employees must reach to earn a reward. A benefits platform or program administrator tracks participation and verifies completed activities.

Employees might earn points for:

• Attending an annual physical or dental checkup.
• Receiving recommended cancer screenings or vaccinations.
• Participating in diabetes education or health coaching.
• Completing nutrition, exercise or stress-management activities.
• Attending financial wellness sessions.

Employees who reach the required point total receive a discount on their health insurance contribution, often for the following plan year. Offering several ways to earn points helps workers choose activities relevant to their needs.

Shay Garrioch, chief human resources officer at the Culinary Institute of America, told Plansponsor, a trade publication, that the institute introduced a points-based program to encourage spending on smaller, proactive health care that might prevent larger claims later.

Employees who accumulate enough points receive a 10% premium discount the following year. Qualifying activities include physicals, dental visits, women’s health screenings, fitness challenges and meetings with a financial adviser. Garrioch said the institute has significantly reduced the frequency and cost of severe claims.

Where potential savings come from

The employee’s discount does not automatically reduce the health plan’s total premium or claims expenses. When an employer lowers the worker’s contribution without a corresponding reduction in plan costs, it generally assumes more of that expense. Administration and incentives also carry costs.

The potential financial benefit comes later, if participation helps employees avoid complications or manage existing conditions more effectively. Connecting someone with diabetes to ongoing treatment, for example, may help prevent an expensive hospitalization.

Self-funded employers pay claims directly, so lower claims can reduce their costs. For fully insured employers, improved claims experience may lead to more favorable renewal pricing, although medical inflation, the insurer’s rating practices and other factors also influence premiums.

Savings are not assured. A randomized study published in Health Affairs found that a workplace wellness program improved some reported health behaviors but did not significantly reduce spending after three years. Employers should evaluate results rather than assume participation alone produces savings.

What employers can do

• Work with your broker or administrator to prioritize appropriate preventive care and chronic-condition support.
• Explain how to earn points, meet deadlines and qualify for the premium discount to employees.
• Offer accessible activities for employees with different abilities and schedules.
• Have advisers review incentive rules, privacy protections and applicable wellness requirements.
• Track participation, claims trends and total program costs over several years.

The strongest approach connects rewards with useful care and follow-up support, giving employees an immediate financial benefit while pursuing better long-term health outcomes.

Many health insurers use prior authorization, which requires approval before the plan covers certain medical services, procedures or treatments. But employees who receive a denial may not realize that they have the right to appeal the decision — and that an initial denial is not necessarily the final word.

Recent research by Bloomberg News and KFF found that a significant share of appealed prior authorization denials is overturned. While the research examined Medicare Advantage, Medicaid-managed care and Affordable Care Act Marketplace plans rather than employer-sponsored group health plans, the findings highlight the potential value of challenging a denial.

Employers can help by educating workers about their appeal rights and directing them to their health plan’s procedures when care is denied.

A growing source of frustration

Prior authorization has become a hot-button issue as patients and doctors complain that the requirements can delay medically recommended care and create administrative headaches.

Health insurers say prior authorization helps prevent unnecessary or overly expensive care and control health care costs. However, criticism from patients, providers and policymakers has prompted the insurance industry to take steps to streamline the process.

Insurers participating in an industry initiative have pledged to reduce the number of services subject to prior authorization and standardize the way requests are submitted and reviewed. Industry groups have reported that participating insurers have reduced prior authorization requirements by about 11% so far, although reporting methods vary by insurer.

Still, denials remain common enough that employers may want to make sure workers know what to do when they receive one.

Appeals can succeed

A Bloomberg News analysis found that about half of prior authorization denials were reversed when appealed, with reversal rates reaching roughly nine in 10 for some plans.

KFF’s analysis of insurer data for 2025 found similarly significant reversal rates. Among appealed standard prior authorization denials, 43% were overturned in plans sold through the federally facilitated ACA marketplace.

At the same time, appeals are relatively rare. That suggests some patients may be abandoning recommended care after receiving an initial denial even though an appeal could have resulted in approval.

What employees can do

Employers and HR staff can encourage workers who receive a prior authorization denial to:

• Read the denial notice. Determine exactly why the request was denied and note all appeal deadlines and instructions.
• Contact their doctor. The provider may be able to supply additional medical records, correct missing information, resubmit the request or request a peer-to-peer review with the insurer.
• Contact the health plan. Ask what documentation and coverage criteria were used to make the decision and what is required for an appeal.
• File an internal appeal. Follow the procedures and deadlines listed in the denial notice and plan documents.
• Request expedited consideration when appropriate. Urgent situations in which a delay could seriously jeopardize a patient’s health may qualify for faster review.
• Explore external review rights. If the insurer upholds its denial, the employee may have the right to have the case reviewed by an independent outside organization.
• Keep records. Employees should retain denial letters, medical records, appeal documents and notes from conversations with the insurer and providers.

The takeaway

Employers don’t need to become involved in employees’ individual medical decisions. But providing clear information about appeal rights and directing workers to available resources may help them navigate a difficult process — and potentially gain approval for care their insurer initially denied.

However, a survey by human resources firm WorldatWork found that roughly 50% of employees spend less than an hour choosing their health plan despite the financial and health consequences that decision can carry throughout the year.

Employers and HR teams preparing for open enrollment should prioritize clear communication, decision-support tools and access to human resources staff that can help employees make the right choices for themselves.

Helping your employees

One of the biggest risks is that employees focus on the most visible costs like their premium contribution while overlooking out-of-pocket costs that could have a greater effect on their finances.

Consider an employee choosing between two plans. One has a lower deductible, making it appear to be the better deal. But it may also require higher coinsurance for a medication the employee takes regularly. Depending on the drug and its tier, those costs could outweigh any savings from the lower deductible.

Many health plan details are easy to overlook but can have significant financial consequences later. Encourage employees to choose a plan using the following checklist:

• Consider all costs. That includes your share of premiums, deductibles, copays, coinsurance, out-of-pocket maximums for medical services and prescription drugs.
• If you take medications, check the plan’s formulary before enrolling to ensure yours are covered and how much you would be expected to pay for it in copays or coinsurance. Mind the deductible as well.
• Look for prior authorization or other requirements that may affect access.
• Confirm that your physicians, specialists and preferred facilities are in the network of the plan you are considering. If you want to stick with your current plan, check to see that your preferred providers are still in network.

Provide different ways to get help

Employees have different preferences for learning about their benefits. They may benefit from a combination of benefits guides, webinars, question-and-answer sessions, benefits fairs and online decision-support tools. Use as many as you can.

Technology can help you compare plans based on their family circumstances, prescriptions, expected medical needs and preferred providers.

Additionally, set aside time for staff who may need one-on-one guidance so they can ask questions and understand their choices. Consider providing access to knowledgeable people who can answer questions when an employee’s situation is too complicated for an online tool.

The takeaway

While you invest heavily in your group health plans, if your staff are not reviewing all of their options, they may discover after enrollment that the plan they selected doesn’t work as expected.

Start communicating early, use multiple channels and give employees time and resources to compare their options carefully. We can help.

These plans give employers more skin in the game and the ability to better address cost drivers and tailor their offerings to fit the needs of their employees.

But while the plans can save both the employer and their workers money, they are not for every organization. Plus, there is a degree of risk as a few serious health issues among group participants can blow open claims costs.

Small employer considerations

While medium-sized and large organizations are more apt to self-fund due to their resources, 21% of employers with three to 199 plan participants were self-funded in 2025, according to a study by the Kaiser Family Foundation. That’s compared to employers with:

• 200 to 999 plan participants: 63%
• 1,000 to 4,999 plan participants: 86%
• 5,000 and more plan participants: 87%

Recently, insurers have been trying to address small and mid-sized employers’ concerns about risk and costs by rolling out “level-funded” plans. These vehicles provide a lower level of self-funding with a stop-loss insurance program that has lower attachment points than typical plans.

For level-funded plans, the insurer estimates the employer’s expected monthly expenses, which include:

• A portion of the estimated annual cost for benefits,
• The stop-loss protection premium, and
• An administrative fee.

The employer pays the above to the insurer every month. If, at the end of the year, claims were significantly higher or lower than expected, there will be financial reconciliation between the employer and the carrier.

These level-funded plans differ from fully self-funded plans, where the employer assumes direct financial responsibility for the costs of enrollees’ medical claims. The employer will usually contract with a third-party administrator or insurer to handle claims and provide administrative services for the plan.

Employers may purchase stop-loss coverage to protect against catastrophic claims.

Stop-loss basics

While these plans are called self-funded, there is still a portion of the costs that is insured to protect against catastrophic claims or unexpectedly high utilization.

There are different types of stop-loss insurance that pay the cost of claims at a certain attachment point, when plan, individual or claims spending exceeds a designated value:

Specific stop-loss coverage — This policy provides protection for the employer against a high claim on any one individual. This is protection against abnormal severity of a single claim, rather than abnormal frequency of claims in total.

Aggregate stop-loss coverage — This policy may limit the total amount the plan sponsor must pay for all claims over the plan year.

The benefits

Customization — Self-funded plans let employers customize their plan to meet the needs of their workforce.

Cost control — Self-funded plans only pay the actual costs, as opposed to fully insured plans, where the premium goes towards the expected health care costs the insurer has forecast, plus its overhead, reserves, profit margin, and more.

Access to claims data — The employer gets detailed access to claims costs, so they can see what claims are driving costs. By looking at claims and plan participant needs, the employer can better decide which benefits to provide, enhance or remove if they are not being used.

Disadvantages

Compliance — Since the employer will be paying for the claims, they will be responsible for fiduciary and compliance issues.

Cash flow — The plan will need to have sufficient money going into its accounts regularly to pay for claims as they arise.

Volatility — Medical outlays can be unpredictable. A spate of high-cost claims can wipe out any potential savings.

The takeaway

If you’re fed up with rising group health plan premiums, talk to us about self-funding. We can review your current insurance arrangement and your plan costs to help you decide if it’s right for you.

The Business Group on Health’s “2027 Employer Healthcare Strategy Survey” projects a median 9.2% increase in employer health care costs in 2027, which employers hope to reduce to about 8% through plan changes. Other forecasts predict similar premium increase in the coming year.

Multiple forces pushing costs higher

There is no single culprit behind the increases. Instead, employers are being hit by large claims, expensive prescription drugs and rising costs of treating common serious health conditions.

Catastrophic claims: According to a survey by the International Foundation of Employee Benefit Plans (IFEBP), employers cited catastrophic claims more often than any other factor as the primary driver of higher costs. A small number of employees play an outsized role in increasing average claims costs due to lengthy hospital stays, complex cancer treatments, specialty medications or other intensive care that can generate claims of hundreds of thousands of dollars or more.

Cancer is a major contributor. In the Business Group on Health survey, 70% of employers ranked cancer as the top condition driving their health care costs, and 92% placed it among their three most expensive conditions. Musculoskeletal conditions ranked second, cited by 68%, followed by cardiovascular conditions at 37%.

Prescription drugs: Pharmacy benefits now account for about one-quarter of employer health care spending, and drug costs are projected to increase 12% in 2026, according to Business Group on Health.

The pressure is coming from several directions. Among IFEBP respondents who identified specialty and other high-cost drugs as their primary cost driver:

• 67% cited GLP-1 drugs,
• 54% cited autoimmune and inflammatory therapies,
• 42% cited cancer drugs, and
• 21% cited cell and gene therapies.

Employers are grappling with how to provide access to effective but expensive treatments without allowing a small number of prescriptions to significantly increase total plan spending.

Medical care and provider pricing: Employers are also paying more for hospital and physician services.

Business Group on Health points to declining population health, rising provider prices and increased use of expensive therapies as part of the broader cost problem. Employers have also underestimated their health care costs for three consecutive years, illustrating how difficult medical expenses have become to predict.

Employers sharpen their cost-control strategies

With costs continuing to climb, employers are increasingly looking beyond simply raising deductibles and shifting more expenses to workers.

Approaches employers are considering include:

• Steering workers to high-value providers. Centers of excellence, high-performance networks and care navigation programs can direct employees to providers with better outcomes and more competitive pricing. Eighty-four percent of Business Group on Health respondents plan to offer at least one center of excellence in 2027.
• Reassessing pharmacy benefits. Employers are exploring transparent or next-generation pharmacy benefit managers that provide greater visibility into drug pricing and rebates. They are also tightening utilization controls on costly drugs, including GLP-1s, and encouraging the use of lower-cost biosimilars when clinically appropriate.
• Demanding more from vendors. Employers are scrutinizing wellness, digital health and other benefit programs for measurable results. In 2027, 58% of Business Group on Health respondents plan to replace underperforming vendors, while the same percentage plan to eliminate underutilized programs. Seventy-one percent are increasing the portion of vendor fees tied to outcomes.
• Improving employee navigation. Providing employees with cost and quality information before they schedule care may help them find higher-quality, lower-cost providers. Employers may also consider reducing cost-sharing for high-value preventive and chronic-condition care.
• Analyzing claims data. Claims audits, utilization reviews and predictive analytics can help employers identify billing problems, high-cost conditions and opportunities for earlier intervention.

The takeaway

With cost pressures coming from multiple directions, a targeted strategy focused on the plan’s largest cost drivers may help control spending while preserving the benefits employees value.

Work with us and your carriers to review claims and utilization data before renewal.

The Affordable Care Act and other laws require employers to furnish certain forms and documents to employees annually. To help your organization remain compliant, we’ve compiled a list of health and wellness plan notices that employers must provide annually, as well as a few that we recommend including in your benefits communications.

Most of these documents must be distributed during open enrollment.

Summary of Benefits and Coverage

The SBC gives employees a standardized, easy-to-compare summary of health plans’ benefits, deductibles, copayments, coinsurance, exclusions and coverage limitations. It is required for most group health plans, including self-insured plans.

When it must be distributed: With open enrollment materials when employees have an opportunity to elect or change coverage.

Medicare Part D Creditable Coverage Notice

Employers offering prescription drug coverage must notify Medicare-eligible employees whether their coverage is creditable under Medicare rules. Creditable coverage is expected to pay at least as much as standard Medicare Part D coverage.

While there is no penalty for employers for failing to send the notice, failure to provide it can lead to higher costs for staff who later enroll in Medicare Part D without having maintained creditable coverage. Because employers typically do not know which employees are eligible for Medicare, sending this notice to all employees is considered a best practice. You can find model notices here.

When it must be distributed: By Oct. 15 each year.

Grandfathered Plan Notice
This document outlines ACA protections for non-grandfathered plans, ensuring participants understand their coverage rights.

When it must be distributed: This notice must be distributed whenever a summary of benefits, description of coverage or enrollment material is provided to participants and beneficiaries.

Children’s Health Insurance Program Notice

This document alerts employees to the availability of premium assistance programs through their state of residence. This notice should be sent to all employees, regardless of location, to avoid the burden of tracking residency status. Failure to provide the CHIP notice can result in fines of up to $137 per employee per day.

When it must be distributed: Although it doesn’t have a fixed deadline, many employers include it in their annual open enrollment materials to ensure consistent delivery.

The Women’s Health and Cancer Rights Act Notice

This federally mandated disclosure informs group health plan participants and beneficiaries of their rights to post-mastectomy breast reconstruction benefits. It must be sent to all employee participants and covered beneficiaries under your health plan.

When it must be distributed: Annually, typically included with open enrollment materials.

Individual Coverage Health Reimbursement Arrangement Notice

Employers offering an ICHRA must give eligible employees a written notice explaining the arrangement and important consequences of accepting it. Among other things, the notice helps employees understand how the ICHRA interacts with individual health insurance coverage and eligibility for premium tax credits through the ACA Marketplace.

When it must be distributed: Generally, at least 90 calendar days before the beginning of each plan year. Employees who become eligible later, such as certain new hires, generally must receive the notice no later than the date the ICHRA can first take effect for them.

The financial pressure is significant. GLP-1 drugs prescribed for weight loss represented 11.4% of corporations’ annual claims in 2025, up from 6.9% in 2023, according to the International Foundation of Employee Benefit Plans. The foundation also found that only 36% of employers covered the drugs for weight loss

Demand, meanwhile, remains strong. A 2025 KFF poll found that one in eight U.S. adults was taking a GLP-1 medication for weight loss, diabetes or another condition.

That leaves employers trying to balance the immediate cost against the possibility that the medications may improve employee health and reduce other medical expenses over time. While some are opting not to cover the drugs for weight loss, others are exploring different ways to help workers access them.

Coverage with certain limitations

An employer can design coverage so that GLP-1 medications are covered only when prescribed to treat certain conditions, such as diabetes or chronic weight management, or when used for preventive care.

This approach can reduce the number of individuals requiring treatment under the plan and ultimately lower long-term treatment costs for these conditions.

An employer can also offer GLP-1 coverage while requiring medical management techniques, such as prior authorization, step therapy and site-of-care requirements.

Requiring one or a combination of medical management techniques before providing employees with GLP-1 coverage can encourage the use of alternative treatments and limit the number of employees who require GLP-1 medications.

Coverage under an HRA

An alternative to adding GLP-1 medications to a group health plan’s formulary is letting employees use a health reimbursement arrangement to cover GLP-1 drug costs. HRAs allow employees to receive tax-free reimbursement for all or a portion of their medical and prescription drug expenses.

Participants typically must enroll and participate in a weight management program to qualify for HRA reimbursement for a GLP-1 prescription.

The program evaluates each participant’s ongoing need for the medication and determines whether to approve the request. If approved, participants fill their prescriptions through a direct-to-consumer pharmacy. Employers can then use the HRA to reimburse all or a portion of the prescription cost.

Looking outside traditional insurance

Another emerging strategy is to bypass insurance.

Drug manufacturers and other vendors have developed direct-to-consumer programs that allow patients to obtain GLP-1 medications at lower cash prices. Employers that exclude weight-loss drugs from their regular pharmacy benefits may direct employees to one of these programs and, in some arrangements, reimburse part of the expense.

A similar direct-to-employer model may allow an employer to carve out GLP-1 weight-loss medications from its pharmacy benefit and obtain fixed, negotiated prices through a specialized vendor. These arrangements could reduce costs and make them more predictable, but employers should proceed carefully.

Purchases made outside the pharmacy benefit may not count toward an employee’s health plan deductible or out-of-pocket maximum. Moving prescriptions outside the traditional system may also make it more difficult to see a patient’s complete medication history, potentially creating care coordination and drug interaction concerns.

Employers also need to consider existing pharmacy benefit manager contracts, which may contain exclusivity provisions. Special care may be necessary for high-deductible health plans to avoid inadvertently affecting employees’ health savings account eligibility.

The takeaway

Much can hinge on how employers handle GLP-1 coverage and the options they provide their employees. The key is to provide access that supports employee health without allowing one fast-growing category of medications to overwhelm the benefits budget.

Before making changes, employers should work with us to review utilization, costs, plan design and alternative purchasing arrangements.

The threshold has been set at 10.22% of an employee’s household income, up from 9.96% in 2026. The higher threshold will give employers more leeway in determining employees’ share of health insurance premiums. It also marks the first time the threshold has exceeded 10%.

Under the ACA, “applicable large employers” — those with 50 or more full-time or full-time-equivalent employees — must offer their workers at least one health plan that is considered affordable based on a percentage of the lowest-paid employee’s household income. If an employer’s plan fails this test, the employer may face penalties for noncompliance.

For 2027, coverage is considered affordable if the lowest-paid employee’s required contribution for self-only coverage under the employer’s lowest-cost plan providing minimum value does not exceed 10.22% of their household income.

The affordability test applies only to the employee’s cost for self-only coverage, not to the premium for family coverage. If an employer offers multiple health plans, the test is based on the lowest-cost option that provides minimum value.

For non-calendar-year plans, the affordability percentage in effect when the plan year begins applies throughout that year. That means a plan year beginning after Jan. 1, 2026, would continue using the 9.96% threshold until the next plan year starts in 2027.

Calculating

Since employers typically don’t know their workers’ household incomes, the IRS provides three safe harbors for determining affordability:

• W-2 wages: The employee’s required contribution generally cannot exceed 10.22% of their Form W-2 wages from the employer.
• Rate of pay: For hourly employees, affordability is based on the employee’s hourly wage multiplied by 130 hours per month. For salaried workers, the monthly salary is used.
• Federal poverty level: Employers can base affordability on the federal poverty level for a single individual.

For calendar-year 2027 plans using the federal poverty level safe harbor in the mainland U.S., the employee’s maximum monthly contribution is about $135.93, based on the 2026 federal poverty level of $15,960. Employers may want to set the contribution slightly below the maximum to avoid exceeding the limit.

Penalties

Failure to provide affordable coverage may result in a penalty of $5,670 per affected full-time employee in 2027, up from $5,010 in 2026. The penalty may apply when an employee is offered unaffordable coverage and receives a premium tax credit for Marketplace coverage.

A separate Employer Shared Responsibility Payment may apply if an employer fails to offer minimum essential coverage to at least 95% of its full-time employees and their dependents and at least one full-time employee receives a premium tax credit for Marketplace coverage.

The separate penalty will rise to $3,780 per employee in 2027 from $3,340 in 2026. It is generally calculated using the employer’s total number of full-time employees minus 30.

Both penalties are indexed to inflation and calculated monthly.

The takeaway

The higher affordability threshold gives employers more flexibility in setting employee premium contributions for 2027, but now is the time to review those amounts in preparation for the upcoming plan year.

We can help assess your plans’ affordability and confirm that they meet the standard, so your firm stays compliant.

Caregiving demands can lead to absenteeism, distraction, fatigue and scheduling conflicts, while the emotional strain of supporting loved ones may reduce engagement and increase the risk of mistakes or accidents, which can turn into costly blowback for your organization. The challenge for employers is that many workers keep these struggles to themselves, potentially leading to them leaving due to the stress.

Since caregiving duties can fall on people of any generation, it’s important for your organization to have a plan to assist staff facing these added pressures.

Gen X most affected

Gen X workers (generally those ages 46 to 61) are feeling the greatest pressure, with many supporting aging parents whose health needs are increasing while still raising children or helping young adult children achieve financial independence.

A recent survey by resume platform Zety found that nearly one in four Gen X employees spends at least two full workdays each week caring for family members.

The challenge extends well beyond Gen X. Care.com’s “2026 Future of Benefits Report” found that:

• Nearly half of full-time employees currently juggle caregiving responsibilities,
• 37% of workers who care for aging relatives also support minor or adult children,
• 53% of employees had missed work because of caregiving challenges,
• 60% experienced increased workplace stress, and
• Nearly half reported lower productivity while arranging or managing care.

Women continue to shoulder most unpaid caregiving responsibilities. According to AARP’s “Caregiving in the U.S.” survey, women account for 61% of unpaid family caregivers nationwide. Care.com also reported that nearly half of women who voluntarily left the workforce in 2025 cited caregiving responsibilities as a primary reason for doing so.

The effects

Employees facing ongoing caregiving strain may be more likely to:

• Experience burnout,
• Disengage at work,
• Reduce their work hours,
• Decline promotions, or
• Leave the organization altogether.

Burnout and disengagement are especially damaging. They can lead to a higher risk of workplace accidents, lower productivity, poor performance and reduced employee morale. If a key employee leaves due to caregiving demands, it can deal a blow to your organization, regardless of whether they are in sales, administration, operations or management.

What employers can do

• Offer flexible work arrangements — These remain one of the most effective tools. Allowing remote work, flexible schedules or compressed workweeks when practical can help employees manage medical appointments and caregiving emergencies without neglecting work responsibilities.
• Expand caregiver benefits — These may include elder care referral services, backup care programs, dependent care assistance and employee assistance programs that provide counseling, planning resources and caregiver support.
• Educate your staff — Make sure employees understand what benefits are available. Many are unaware that their benefit packages may include caregiving resources through employee assistance programs, health plans or third-party vendors.
• Train managers to recognize caregiver stress — Encourage open communication and evaluate employees based on results rather than how many hours they are in the office. These practices can help them remain productive while managing family responsibilities.

If you have questions about caregiving benefits, please give us a call.

For the first time, many employers are managing a workforce that spans four generations: Baby Boomers, Gen X, Millennials, and Gen Z.

That creates a benefits challenge.

Employees may work for the same organization and enroll during the same open enrollment period, yet their needs can look very different. A Baby Boomer approaching retirement may care most about financial protection and dependable medical coverage. A Gen X employee may be balancing children, aging parents, and growing financial pressure. Millennials may place more weight on mental health support and financial wellness. Gen Z may expect greater choice and a clearer digital experience.

Trying to build a single benefits package around an “average employee” can leave everyone with something that works reasonably well but fits no one particularly well.

The better question is this:

How can employers build one benefits strategy that gives different employees room to choose what matters most to them?

At-a-Glance Chart: What Each Generation Tends to Value

Baby Boomers: Protecting What They’ve Built

For Baby Boomers, benefits increasingly center on protection.

As employees move closer to retirement, life insurance, disability coverage, long-term care considerations, and broader financial protection can become more important. Medical coverage also carries greater weight as employees manage more complex health needs and rely more heavily on specialists and provider networks.

Predictability matters too.

Employees in this stage of life may be less interested in novelty and more concerned with understanding what their care will cost. Network access, coverage depth, and manageable out-of-pocket exposure can carry more practical value than adding another trendy perk.

For employers, the takeaway is straightforward: make sure the benefits package protects what these employees have spent decades building.

Gen X: The Squeezed Middle

Gen X often occupies one of the most complicated financial stages of working life.

Many employees in this generation are simultaneously supporting children, preparing for their own retirement, and helping aging parents. That combination can put pressure on time, money, and emotional bandwidth.

Benefits that address caregiving can therefore become especially relevant. Flexible leave, eldercare resources, financial planning support, and dependable disability coverage may solve more immediate problems than highly promoted workplace perks.

The value may not always be obvious during enrollment.

A strong disability plan, for example, rarely feels exciting until an employee understands what would happen to the household if income suddenly stopped. Financial or legal planning resources may receive little attention unless employees understand when and how to use them.

That makes education almost as important as the benefit itself.

Millennials: Value, Flexibility, and Mental Health

Millennials now represent a major part of the workforce, and many are navigating a combination of family responsibilities, housing costs, debt, career growth, and long-term financial planning.

Mental health coverage is particularly relevant for this group. Access to counseling, behavioral health services, and related support can directly influence how employees perceive the overall value of their benefits package.

Financial wellness matters as well.

Student debt, household debt, emergency savings, and retirement planning can compete for the same dollars. Employers that provide useful financial tools or resources can help employees make better decisions across several areas of their lives.

The larger lesson is that employees will often place meaningful value on benefits when those benefits address problems they are actually experiencing.

A long list of offerings does not automatically create a strong package.

Relevance does.

Gen Z: Choice and Clear Communication

Gen Z is entering the workforce with different expectations around how benefits should work and how information should be delivered.

A broader voluntary benefits menu can be attractive because it allows younger employees to choose protection based on their own circumstances. Accident coverage, critical illness insurance, hospital indemnity coverage, and other voluntary options can give employees more control without forcing the employer to build every preference into the core medical plan.

Mental health support also remains important.

Communication may be just as significant.

Benefits can lose much of their perceived value when employees cannot understand what they have, how it works, or why they would use it. For a generation accustomed to intuitive digital experiences, dense PDFs and once-a-year enrollment presentations can create unnecessary friction.

Clear explanations, accessible digital resources, and decision-support tools can help employees connect benefits with real-life situations.

Employers Do Not Need Four Separate Plans

Generational differences do not mean employers should create a separate benefits program for every age group.

That approach would quickly become expensive and difficult to administer.

A better strategy creates a strong foundation and gives employees meaningful ways to personalize it.

Three shifts can help.

1. Expand the voluntary benefits menu

A broad voluntary offering allows employees to select additional protection according to their own circumstances.

The employer does not have to predict exactly what every employee will need. Employees can make those decisions themselves.

2. Invest in benefits communication

A benefit employees do not understand may have very little perceived value.

Decision-support tools, digital resources, clearer enrollment materials, and ongoing education can help employees understand both what is available and when it becomes useful.

Communication should continue beyond open enrollment. Employees experience health, financial, and family decisions throughout the year.

3. Reconsider the traditional “one plan for everyone” model

Employers can also explore contribution-based strategies that give employees more control over how benefit dollars are used.

Depending on the workforce and organization, approaches including individual coverage health reimbursement arrangements, or ICHRAs, may provide greater flexibility by allowing employees to direct employer funding toward coverage that better matches their circumstances.

The goal should be to design around the actual workforce rather than a hypothetical average employee.

Start With the Workforce You Actually Have

Generational labels are useful for identifying patterns, but they should not become stereotypes.

Two employees of the same age can have completely different financial situations, family responsibilities, health needs, and priorities.

That is why workforce data matters.

Employers should examine who their employees are, how they currently use their benefits, where employees experience financial pressure, which benefits receive little engagement, and where employees struggle to understand their options.

The strongest benefits strategies combine that information with flexibility.

Four generations may share the same workplace.

They do not have to value every benefit the same way.

A benefits strategy can account for those differences without becoming four separate programs. Give employees a strong core, meaningful choices, and enough information to decide what fits their lives.

Group Benefit Solutions helps employers build contribution-based, self-funded, and ICHRA strategies around how their actual workforce uses benefits.

Want to see what that could look like for your organization? Let’s talk strategy.