Planning employee benefits for another year can feel a little like trying to hit a moving target.
Healthcare costs are rising. Employees have different expectations than they did a few years ago. New medications and technologies are changing the benefits landscape. At the same time, employers are trying to offer a competitive package without simply passing every additional cost on to employees.
As we look toward 2027, here are some of the areas I think employers should have on their radar.
1. Healthcare costs will continue to put pressure on employers
This is probably the biggest issue employers will be talking about as they head into 2027.
According to Mercer, employers expect health benefit costs to increase an average of 8.2% next year, even after planned cost-saving measures. Without changes to their plans, employers estimated the increase would be closer to 11%.
For employers, the question becomes: How do you manage those increases without simply shifting more costs to employees?
There are several strategies worth considering, including:
- Reviewing your health plan design and contribution strategy
- Evaluating whether employees are getting good value from the providers and networks available to them
- Looking closely at pharmacy costs and prescription utilization
- Helping employees better understand how to use their healthcare benefits
- Comparing your current plan and vendor arrangements rather than automatically renewing them year after year
A high-deductible health plan paired with a health savings account may also make sense for some employers. These plans can offer lower premiums and tax advantages, but they aren’t the right answer for every workforce.
The important thing is to look at the whole picture. Cutting the employer’s cost isn’t necessarily a win if it creates an unaffordable plan for employees or leaves them struggling to understand how to use it.
2. GLP-1 medications will require some difficult decisions
GLP-1 medications have quickly become one of the biggest conversations in employee benefits. For employers that cover these medications for weight management, the cost can be significant. Business Group on Health found that 67% of surveyed employers currently cover GLP-1s for weight management, but only 72% said they were likely to continue that coverage in 2027.
Some employers are considering eligibility requirements, weight-management programs, specific prescribing requirements, or other utilization-management strategies to manage costs.
3. Mental health benefits need to be useful, not just available
Mental health has become an established part of the benefits conversation. The next step is making sure employees can actually use the resources an employer provides.
An employee assistance program is valuable, but it may not be enough on its own. Employers are looking at additional resources such as virtual mental health care, coaching, stress-management programs, and manager education.
The bigger issue is utilization.
If you have a benefit that employees don’t understand, don’t know how to access, or don’t feel comfortable using, it isn’t providing much value. Communication and education are just as important as selecting the program itself.
4. Financial wellness is becoming part of the employee benefits conversation
While retirement plans remain a cornerstone of most benefits packages, employers are broadening the financial wellness conversation. Concerns about debt, inflation, saving for major life events, and long-term financial security are influencing how employees view their overall compensation package.
At the same time, employers are becoming more engaged in understanding the plans they already offer. They’re asking more questions about investment options, participant outcomes, fees, and employee engagement.
The shift isn’t necessarily toward offering more financial benefits. It’s toward ensuring existing programs are delivering the support employees actually need.
5. Employees will continue to look for benefits that fit their lives
There is no such thing as an average employee.
An employee with young children may have very different priorities than someone caring for an aging parent. A recent college graduate may be focused on student loans, while another employee may be thinking about retirement.
Thus, we’re seeing more specialized benefits emerge around specific employee needs. There are companies, for example, developing benefits specifically for areas such as menopause and women’s health.
Some of these offerings will prove valuable. Others may not be a fit for a particular workforce. The key is not to chase every new benefit. It is to understand your employees and determine where your benefits package has gaps.
AI is already changing how employees find information and how benefits are administered. We can expect to see more tools that help employees compare options, answer basic benefits questions, navigate enrollment, and receive more personalized information.
That can be a good thing.
I remember when I joined Ford Motor Company, and there were dedicated benefits representatives available to answer questions in person. Technology has certainly come a long way since then. But I don’t think the personal touch is going away.
Benefits can be complicated, and sometimes an employee doesn’t need a chatbot. They need someone who understands their situation and can help them work through a question. AI should complement good benefits communication and human guidance, not replace it.
7. Leave and caregiver benefits will continue to evolve
Parental leave has received a lot of attention in recent years, and some employers are offering increasingly generous programs. But employers are also thinking more broadly about what happens when employees need time away to care for a parent, spouse, or other family member.
That may mean expanded caregiver leave, bereavement benefits, eldercare resources, family-building benefits, or greater flexibility around where and when employees work.
Not every organization can offer six months of parental leave or an extensive list of caregiver benefits. And that’s okay. The goal isn’t to match the most generous employer in the market. It’s to understand what is realistic for your organization and what will have the greatest value for your employees.
For many small and midsize employers, flexibility can be just as meaningful as adding another formal benefit.
Looking Ahead to 2027
I don’t think the goal for 2027 should be to offer more employee benefits.
It should be to offer the right benefits for your employees and your organization.
That may mean changing your health plan. It may mean taking a closer look at your retirement plan. It may mean adding a benefit that addresses a real need among your employees. Or it may simply mean doing a better job of communicating and educating employees about the benefits you already provide.
The employers that do this well will be the ones that look at benefits from both sides of the equation: What does this mean for our employees, and what does it mean for our business?
That balance is going to be increasingly important as we head into 2027.
Interested in what these trends could mean for your organization? Join us for our upcoming webinar, where we’ll discuss practical strategies for navigating benefits, workforce, and compliance changes in 2027. Register now.
