Health Benefits Rebound in Popularity but Look Different in a Post-Pandemic World

Businesses have changed the way they’re investing in workers’ health in recent years, SHRM President and Chief Executive Officer Johnny C. Taylor, Jr., SHRM-SCP, and Chief Data & Insights Officer Alex Alonso, Ph.D., SHRM-SCP, said during SHRM’s recent Benefits Trends Virtual Retreat. Core health plan benefits remain important to U.S. employers, with 88% of employers deeming them “very important” or “extremely important” in the 2024 SHRM Employee Benefits Survey. However, employer offerings have expanded to include telehealth services and a greater emphasis on mental health and wellness—trends often driven by the workforces of other countries.

“When you look at the innovation in wellness benefits, more often than not, it’s happened outside the U.S.,” said Alonso. “There’s an opportunity for us to learn because a lot of those multinational enterprises or employers are the ones that are testing it in other markets— India, say, or the Middle East—and then bringing it onto our shores as more of a global benefit for their entire workforce.”

The SHRM Employee Benefits Survey, one of the longest-running annual surveys examining employee benefits trends across the U.S., found that 97% of employers are providing some form of health plan coverage in 2024, even though individuals and families have the option to purchase insurance through the  federal and state marketplaces created under the Affordable Care Act.

“Two key factors turbocharged the importance of health care benefits” since 2017, said Alonso. The first is the realization that spending money on wellness initiatives can reduce overall health care costs, leading businesses to invest more in those kinds of programs. The second is the telehealth revolution accelerated by the pandemic.

“Between 2017 and 2020, we actually saw a dip in the importance of health care benefits,” said Alonso, with employer ratings of the importance of health benefits declining 2 percentage points over the period. “It was the first time that we ever saw retirement benefits and financial benefits actually equal the importance of health care benefits.” However, that trend quickly reversed in years following the start of the COVID-19 pandemic in 2020, albeit with a greater emphasis on mental health benefits, as mental health issues were rapidly destigmatized during COVID.

“Everyone experienced the mental health aspects of COVID, whether it was that they were working from home, dealing with burnout and depression,” said Alonso. But stress from coping with a national emergency and caring for others also took a toll, he added, which made mental health benefits and telehealth solutions even more appealing. According to the 2024 SHRM Employee Benefits Survey, 90% of employers now offer mental health benefits.

Taylor noted that many employees also had to deal with the stress of continued close proximity to family members during COVID and the burden of helping others, particularly children, deal with the crisis. The pandemic “specifically impacted employees to watch their children struggling with isolation,” he said.

Taylor and Alonso said many children saw their education upended during the pandemic, which is likely to have long-term impacts on the workforce. Even if children managed to stay on track academically, they may have missed out on social and leadership opportunities that serve as a foundation for later personal growth.

“It’ll impact us for generations,” Taylor added.

Employers have found that providing family care benefits, such as leave to care for family members, can reduce overall health care costs, Alonso said. Many of the largest expenses to health care plans come not from employees but from family members on their plans, especially dependents, and when employees have the flexibility to be more involved in their family members’ care, they tend to see reduced costs. Employees also experience less stress and enjoy better mental health when they can participate in family members’ care.

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