Lately, I’ve been hearing from employers who are feeling the pinch of rising benefit costs while still wanting to offer competitive packages that attract and retain great people. It’s a tricky balance — you want to take care of your team, but you also need to keep an eye on the bottom line.
There’s a saying that people join an organization for the compensation but stay because of the benefits. That couldn’t be truer today. As healthcare costs rise and employee expectations continue to evolve, smart benefit design can make a big difference — helping you control costs, boost engagement, and show your employees that you value them.
Health Insurance: Finding Creative Ways to Manage Rising Costs
Health insurance remains one of the largest expenses for employers, and many of my clients are reporting 10–20% increases for 2026 renewals. The good news is that there are several strategies to help manage costs without sacrificing quality coverage.
Here are a few we’re seeing work well:
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High-Deductible Health Plans (HDHPs) paired with Health Savings Accounts (HSAs): These plans usually come with lower premiums and can help employees become more cost-conscious consumers.
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Self-funded or level-funded plans: For small and mid-sized employers, these options can offer more flexibility and visibility into claims — and sometimes, real savings.
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Professional Employer Organizations (PEOs): Joining a PEO can give smaller companies access to large-group rates and better benefits than they could secure on their own.
Policy Adjustments That Support Sustainability
Beyond insurance, a few policy changes can help employers keep benefits affordable while maintaining fairness and flexibility.
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Spousal surcharges or carve-outs: If an employee’s spouse has access to coverage elsewhere, encouraging them to use that plan can reduce costs — though it’s not the right fit for every culture.
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Wellness incentives: Rewarding healthy behaviors (like biometric screenings or quitting smoking) can have long-term payoffs in lower claims and healthier employees.
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Cost-sharing adjustments: One client recently decided that future employees would no longer receive a company contribution toward family coverage. While this approach isn’t for everyone, it helped them protect current employees and create a more sustainable cost structure moving forward.
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Flexible work arrangements: Flexibility continues to be one of the most valued benefits employees ask for. If your organization can support hybrid or remote work, it can be a significant retention advantage — and it often reduces overhead while supporting employee well-being.
Disability and Life Insurance: Look Closely at the Details
Disability and life insurance are easy to overlook, but they can make a big difference when employees need them most.
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Short-term disability: Depending on your workforce and claims history, self-funding this benefit can sometimes make financial sense.
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Optional disability and life coverage: Offering these as employee-paid, after-tax options is often preferred — giving employees choice while protecting your budget.
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Coverage caps: Always review the salary limits on your disability policies. The last thing you want is for an employee to discover that their “67% of pay” benefit is capped much lower than expected.
Wellness Programs: Creating a Culture of Health
Wellness programs aren’t just about gym discounts anymore. The most effective ones foster a culture of overall well-being — encompassing physical, mental, and financial aspects. Strong programs can:
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Reduce absenteeism
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Improve morale and productivity
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Lower long-term health costs
Popular components include mental health resources, fitness challenges, nutrition coaching, and mindfulness training. When these initiatives are paired with small incentives or recognition, participation and outcomes tend to improve.
EAPs: An Underused but Powerful Resource
Employee Assistance Programs (EAPs) often fly under the radar, but they provide valuable, confidential support. They can connect employees to help with:
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Mental health counseling
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Financial or legal issues
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Substance abuse challenges
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Crisis support
We’re seeing more employees take advantage of these resources as conversations around mental health become more open. Promoting your EAP — and reminding employees it’s free and confidential — can make a real difference in their well-being.
Nontraditional Benefits on the Rise
In today’s multigenerational workforce, flexibility and personalization go a long way. Here are a few benefits gaining momentum:
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Pet insurance: A small but meaningful perk that resonates with younger employees who see their pets as family.
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Buying or selling vacation time: This allows employees to tailor their time off, whether they want more rest or extra income. I’ve seen everything from employees cashing out several weeks to those going slightly negative in their vacation balance. Offering flexibility here helps meet individual needs.
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Student loan repayment assistance: A strong differentiator for attracting younger talent, and it’s tax-deductible up to $5,250 per year.
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Lifestyle spending accounts (LSAs): These stipends can be used for wellness, education, or personal development — allowing employees to choose what matters most to them.
Communicating the Full Value of Benefits
Finally, make sure employees understand the full value of what you provide. Sharing a personalized summary that shows the total cost of each employee’s benefits — including your contributions — helps them see the true investment your organization makes. This transparency builds appreciation and reinforces your culture of care.
Final Thoughts
Benefits are no longer one-size-fits-all. By combining cost-saving strategies with innovative, flexible offerings, you can design a package that reflects your values, supports your team, and fits your budget.
If you’re rethinking your benefits for next year, let’s talk about what’s working — and what might need a refresh. With a few thoughtful adjustments, you can create a benefits program that’s both sustainable and meaningful for your team.
