2025 Employee Benefits: What's Trending Now

As open enrollment season approaches, employers across the nation are preparing to offer a range of voluntary benefits that cater to the diverse needs of their workforce. These benefits, which include everything from supplemental health coverage to pet insurance, play a crucial role in enhancing employee satisfaction, retention, and overall wellbeing. In 2025, several key voluntary benefits are expected to dominate the landscape, each offering unique advantages for both employees and employers. Understanding these trends and integrating them effectively into your benefits strategy can provide significant organizational value.

The Growing Significance of Voluntary Benefits

Voluntary benefits have evolved from being mere add-ons to becoming integral components of an employer's overall benefits strategy. According to a recent survey by Buck, a Gallagher Company, 86% of employers consider voluntary benefits essential to their wellbeing strategy. This shift is driven by the recognition that voluntary benefits not only enhance employee satisfaction but also contribute to cost savings for employers. When integrated with core benefits, these offerings can streamline administration, increase utilization, and reduce overall benefit costs.

Richard "Rae" Egleston, president of voluntary benefits at Gallagher, emphasizes the importance of integrating these benefits into the same administrative platform as core benefits. This integration simplifies the enrollment process, improves customization for employees, and fills coverage gaps. As a result, employees experience enhanced mental and financial wellbeing, while employers benefit from higher engagement and reduced spending.

1. Supplemental Health Benefits

Supplemental health benefits, including critical illness, accident, and hospital indemnity plans, have long been popular voluntary benefits. These offerings provide employees with additional financial protection in the event of unexpected health issues, ensuring that they are not burdened by out-of-pocket expenses.

In 2025, these benefits are expected to see even greater adoption. The WTW Best Practices in Healthcare Survey indicates that the percentage of employers offering critical illness coverage could rise from 69% in 2023 to 80%. Similarly, accident coverage is projected to increase from 67% to 76%, and hospital indemnity coverage from 57% to 71%. These benefits not only provide peace of mind to employees but also contribute to their overall financial stability.

Moreover, employers are expanding the scope of supplemental health benefits to include coverage for mental health, chronic illnesses, and family-forming journeys. This broadening of coverage reflects the growing recognition of the diverse needs of the workforce, particularly as mental health and wellbeing become increasingly prioritized.

2. Legal Plans and Services

Legal plans and services have emerged as a key voluntary benefit, with 68% of employers currently offering them, according to Gallagher's 2024 Workforce Trends report. These plans provide employees with access to legal assistance for a variety of needs, including will and trust creation, name changes, and adoption agreements.

The expansion of legal services to cover surrogacy agreements, egg/sperm/embryo donation, and other family-forming processes underscores the growing importance of providing comprehensive support for employees' personal and family needs. By offering these services, employers demonstrate their commitment to supporting their employees beyond the workplace, fostering a culture of care and inclusivity.

3. Identity Theft and Cybersecurity Protection

In today's digital age, cybersecurity threats are a significant concern for both employers and employees. The rise in cyberattacks, such as the recent breach at National Public Data, highlights the need for robust cybersecurity protection. Employers are increasingly offering identity theft protection and cybersecurity plans as voluntary benefits to safeguard their employees' personal information.

These benefits not only protect employees from the financial and emotional toll of identity theft but also contribute to a sense of security and trust within the organization. As remote work continues to be a common practice, providing cybersecurity protection becomes even more critical, as employees access corporate networks from various locations.

4. Permanent Life and Long-Term Care Plans

Permanent life insurance and long-term care plans are gaining traction as voluntary benefits, driven by changing demographics and state-level initiatives. For example, Washington state's WA Cares program, funded through a payroll tax, provides public long-term care, prompting employers to consider offering similar benefits.

Julie Johnson, senior director of voluntary benefits at WTW, notes that other states are exploring similar programs, which is driving increased employer interest in permanent life and long-term care plans. These benefits provide employees with the assurance that they and their families will be financially protected in the event of long-term care needs or the death of a breadwinner.

5. Pet Insurance

The COVID-19 pandemic led to a surge in pet adoptions, particularly among remote and hybrid workers. As a result, pet insurance has become a highly requested voluntary benefit. However, employers must carefully evaluate the options available, as not all pet insurance plans are created equal. Some offerings are insurance-based, while others are discount programs.

Providing pet insurance as a voluntary benefit not only addresses the needs of pet-owning employees but also contributes to their overall wellbeing. Pets are often considered members of the family, and offering insurance coverage for their care demonstrates an employer's commitment to supporting employees' personal lives.

Trends in Voluntary Benefits: Bundling and Integration

One of the most significant trends in voluntary benefits is the bundling of these offerings with core benefits, such as medical or life insurance. This approach ensures that employees receive maximum value from their benefits package and simplifies the claims process by integrating medical claims data.

Bundling voluntary benefits with core offerings enhances the overall employee experience, making it easier for employees to access and utilize their benefits. This trend is particularly important as employers seek to create a seamless, user-friendly benefits experience that promotes employee engagement and satisfaction.

The Future of Voluntary Benefits

As we look ahead to 2025, it is clear that voluntary benefits will continue to play a critical role in attracting and retaining talent, promoting employee satisfaction, and supporting overall wellbeing. Employers that prioritize the integration and bundling of these benefits will be well-positioned to meet the diverse needs of their workforce.

At Axis HR Solutions, we understand the complexities of designing and implementing a comprehensive benefits strategy that aligns with your organization's goals. Our team of experts is here to help you navigate the evolving landscape of voluntary benefits, ensuring that your offerings not only meet the needs of your employees but also contribute to your organization's success.

Visit our website at axishrky.com to learn more about how we can assist you in optimizing your benefits strategy for 2025 and beyond. Let us help you create a benefits package that drives employee engagement, satisfaction, and retention while aligning with your organization's financial objectives.