New research from LIMRA shows that employees are willing to spend less on their benefits than in previous years. Attributing the new reticence to inflation and “tighter wallet share,” LIMRA’s researchers say the median maximum monthly amount employees are willing to spend on benefits has decreased to $130, down from $150 in 2022 and 2023.
Based on the 2024 Beat Study: Benefits and Employee Attitude Tracker, a survey of 4,000 U.S. employees conducted in January, they add that these cost pressures might lead employees to reduce or drop certain benefits to save money. “If rising costs continue, employees may also look to reduce their retirement contributions,” the report further warns.
Interestingly, workers who are already enrolled are more likely to spend more on their workplace benefits. “For example, enrolled employees are willing to spend a median of $150 per month on benefits, versus $100 for employees who are offered benefits but are not enrolled,” they write.
There is also an opportunity to help workers better understand their benefits, with the survey revealing a wide range in employee’s understanding of benefits. “Employees have a higher understanding of core benefits such as dental, medical insurance and retirement savings,” they write, “whereas they understand disability insurance and supplemental health plans the least.”
Improving education efforts, they say, could also improve enrollment and usage. “Employees who do not understand these benefits may mistakenly think something is covered when it’s not or they may neglect to file eligible claims. Communication remains crucial,” they state.
“Nearly three quarters of workers, 73 per cent say they would like to receive benefits information more frequently throughout the year. Half of workers say their employer only communicates about their benefits during open enrollment.”