Every year, we interview hundreds of Jellyvision customers to find out what their biggest priorities, worries, and challenges are. And as we head into 2024, there’s one big topic on everyone’s mind.
Can you guess what it is? In 2022, The Great Resignation took over, and HR pros told us that 2023 was all about employee retention and holistic health. But if we had to put a title on 2024, it would be: The Year of The Budget.
Employers of all industries have money on their minds thanks to never-ending inflation, and they’re worried about maintaining a strong bottom line. They’re responding by slowing their hiring efforts, and many are working through mergers and acquisitions to pool their resources with other organizations.
And while it’s been a hot topic for years now, healthcare costs are rising monumentally this year—and HR pros are more concerned than ever. Experts predict that we’ll see the greatest increase in a decade in 2024:
And of course, we couldn’t talk about rising healthcare costs without mentioning this year’s greatest offender: Ozempic. Jellyvision customers say weight loss drugs are putting a huge dent in their claims costs, and Reuters predicts that drugs like Ozempic will contribute to a 1% increase in overall healthcare spending this year. A whole percent!
But the folks we interviewed also told us that it’s not just about pinching pennies. They’ve also worked tirelessly over the past few years to strengthen their relationships with employees, and they know that their benefits package is one of their most crucial retention tools.
So now, HR pros are walking a tightrope: how can we contain healthcare spending, while continuing to care for our employees’ minds, bodies, and wallets?
It turns out, you all are expertly toeing that line. You might be getting thrifty in an effort to contain costs, but the customers we spoke with told us that you’re finding ways to make your hard work shine—by better spotlighting existing resources, driving greater benefits awareness and engagement, and helping employees fully value all that your organization has to offer.
So give yourself a pat on the back, and dig into brand new insights that will help you plan for the year ahead. Our hope is that these ideas from your peers will help you:
- Learn what HR pros have to say about the topics that are on all of your minds.
- Refine your existing strategies based on the latest HR trends.
- Take action on the priorities you choose to focus on in 2024.
- Employers’ biggest concern for 2024? 51% say it’s rising healthcare costs, brought on by higher benefits usage, increased premiums, prescription drug prices, and weight loss drugs.
- Despite rising costs, HR pros are committed to a strong benefits experience. Employers know that their benefits package is the most important way to care for (and retain) their workforce, so they’re doing everything they can to maintain the status quo.
- There’s hope! HR pros are finding creative ways to prioritize the employee experience, by highlighting existing resources, leaning on non-medical plan benefits, and investing more in ongoing education.
2024’s urgent problem: rising healthcare costs
There was one topic that came up in almost every conversation we had with Jellyvision customers this year: employers are deeply concerned about how quickly healthcare costs are rising.
Experts expect that we’re about to see the biggest leap in over a decade, and alarm bells are going off for HR pros everywhere. They know that another increase in costs is not only going to affect their organization’s budget, but it will have a major impact on their employees’ lives, too.
But what exactly is causing this inflation in costs? We asked folks where they’re seeing the biggest increases. Here’s what they had to say.
Employees are using their benefits more
Sounds great, right?! Our workforces are finally taking full advantage of the resources we offer them! Wellllll…not so fast.
It turns out, employees are still catching up from the COVID era, and are finally getting around to delayed procedures and appointments. That means their health issues may be worse than if they’d sought treatment earlier, and claims costs are piling up right now:
Premiums are going up
Simply put, healthcare plans are getting more expensive…for everyone. In 2023, the average annual health insurance premium in 2023 was $8,435 for single coverage and $23,968 for family coverage. That’s a 7% increase from the prior year.
And for employers, the leap in premiums is even worse:
Prescriptions are getting more expensive
Just when you thought your Walgreens receipt couldn’t get any higher…prescription drug prices are going up yet again. That’s right, the average cost increase in 2023 was 15.2%, up from 11.2% in 2022. Experts predict that this year will be no different.
Average Prescription Cost Increase By Year
HR pros are taking notice, and say frequent prescription changes are causing more issues than in years past:
Ozempic is this year’s hottest drug
Lastly, Jellyvision customers identified a brand new—and highly relevant—reason for rising healthcare costs: weight-loss drugs. (O-O-O-Ozempic!)
Trendy new weight loss drugs aren’t just in demand for diabetes patients—they’re also popular with the general population. And these highly sought-after drugs have a major effect on the healthcare economy. Of its projected 8.5% increase in employer healthcare costs for next year, Aon anticipates that weight loss drugs alone will contribute 1 percentage point.
Wegovy, an approved obesity treatment, is soaring in U.S. sales. In Q2 alone, the popular drug made over $1 billion last year.
Maintaining a strong support system: How HR pros are continuing to care for employees without new resources
Gosh, all this talk about rising healthcare costs is a bit depressing, isn’t it?
But there’s good news! Here’s where we spotted a glimmer of hope in our conversations with our customers. Thankfully, HR pros are more committed than ever to supporting their workforces’ health: physically, mentally, and financially. The folks we talked to understand how important their total rewards package is—in fostering employees’ trust, increasing productivity, and recruiting and retaining talent. And they’re not ready to give up on their benefits packages just yet.
Instead, they’re focused on reworking what they already have in favor of more cost-effective solutions. They’re exploring new providers, changing plan designs, and moving employees to different plans in an effort to maintain top-rated coverage at a lower cost.
The end goal? Helping employees see more value in what’s already available to them:
1. Making the most of existing benefitsBecause budgets are so tight, most organizations aren’t adding many new benefits this year. Instead, our customers told us they’re shining a spotlight on their existing resources, by driving benefits awareness and engagement year-round, not just at open enrollment. HR pros are working on meeting employees where they are, with the benefits information they need in the moment. And with an increasingly dispersed workforce, that’s easier said than done:
So how are employers cutting through the noise, pointing employees in the right direction at the right time? Our conversations revealed that HR pros are becoming their own little marketing team. They’re targeting their messaging to specific employee populations, making sure their benefits package appeals to all demographics.
Another HR pro reminded us that better benefits engagement starts at home. After all, healthcare decisions don’t just involve the employees at your organization—it’s about their families, too.
Overall, one theme was clear: true personalization is the key to making sure employees engage with their benefits year-round.
Find out how ALEX uses predictive analytics and behavioral science to personalize the benefits journey for every employee.
2. Expanding benefits use beyond medical plans
While medical plans are the star of the show this year thanks to their rising costs, HR pros reminded us that healthcare is just the start. HR pros are softening the blow of medical plan changes by leaning on the rest of their benefits package, reminding employees that their organization is still committed to their holistic well-being.
From mental health resources to gym memberships to childcare resources, employers are showing their workforce that they support every aspect of their lives.
One major holistic health initiative? Jellyvision customers reminded us that they’re not the only ones worried about budgeting this year. They recognize that employees are stressed about their finances too, so many employers are focused on ways to help employees save and plan for the future.
As claims costs rise and employees catch up on deferred care from the COVID era, employers are also especially focused on disease management. Folks with chronic conditions tend to contribute the most to a company’s benefits spending, so Jellyvision customers said they’re looking for ways to better educate this population.
3. Educating employees, new…and old
After a rocky few years with lots of job market movement, things are settling down. Jellyvision customers told us they’re not as focused on talent acquisition as they have been in years past, and are instead putting their efforts towards educating and retaining the staff members they’ve already hired.
HR pros know how expensive it is to replace an employee, so they’re protecting their bottom line by giving their onboarding and ongoing education programs a boost. (After all, we’re supposed to “Love the Ones We’re With,” right?)
A spike in mergers and acquisitions is also affecting organizations of all industries, and HR pros tell us that’s adding pressure to their companies’ onboarding processes:
Jellyvision customers also acknowledged the need for ongoing new hire education beyond the first few months. While it’s important to prioritize benefits orientation as soon as employees walk in the door, they don’t always retain the information they receive. Reminders throughout the year can be helpful:
4. Streamlining the employee experience
Does it feel like 2020 was 50 years ago? It does to us, and it seems like our HR pros agree: we’ve made record advances in how, when, and where we work together.
Our workforce is getting used to a whole new normal, and many of our customers said they’re focused on streamlining an improved version of the employee experience:
From office returns to learning how to use new healthcare plans, employers are facing the “🎵 ch-ch-ch-changes 🎵,” ensuring a smooth transition from the “old way” to the “new way.”
While this year revealed that HR pros are focused on many of the same priorities as in years past—like always-on benefits engagement, holistic well-being, and a strong employee experience—2024 is also throwing a big wrench into our strategies.
That wrench? The biggest healthcare cost increase in recent memory. And while it’s tempting to think about cutting back on benefits, that’s not an option for employers who are worried about protecting their relationships with employees.
So this year will be all about perfecting the balancing act: containing spending where possible, while encouraging employees to take full advantage of the resources you offer.
Let’s get scrappy, HR pros! If your peers offered one thing during our conversations this year, it’s hope. We hope that through the insights they shared, you’ll be inspired to:
- Get creative with your medical plans. Explore other providers. Ask your benefits broker to provide data and insights on switching up plans or benefits design. Dive into data early to consider changes for this upcoming open enrollment. Make it your goal to continue to offer top-rated care at the best possible price.
- Be analytical. Our HR pros gave us a few great reasons why healthcare costs are rising. So target those problems specifically, driving your employees towards more cost-effective prescription drugs, weight loss solutions, and other healthcare choices.
- Get personal. The best way to make your benefits package resonate is to make the benefits journey unique to each and every employee.
- Just get started. When it comes to employee well-being, the goal isn’t perfection—just get the ball rolling and find ways to improve on your strategy as you go.
We know it’s a tall order. But we also have full confidence that you’re going to pull it off. Because why wouldn’t you? You’re an HR pro…AKA a superhero.
And if you ever lose your footing, know that the Jellyvision team is here to talk through your benefits challenges. Just give us a ring!
Jellyvision performed a qualitative survey of 180+ companies from December 2023–February 2024 via phone interviews. Job titles of individuals surveyed include VP of human resources, global director of benefits and compensation, HR specialist, benefits strategy manager, total rewards consultant, and others. Company size ranged from small- and medium-sized businesses to large enterprises. All interview participants are based in the U.S.