Why the Future of Work Requires a Different Approach to Employee Benefits
PAGE
By PAGE Editor
The nature of work has changed permanently, and the old playbook for employee benefits hasn't kept pace. Hybrid schedules, rising healthcare costs, and a workforce that expects more personalization from every employer interaction have combined to expose the cracks in traditional benefits models. Companies that want to attract and retain talent in this new environment can't simply offer the same plan they've renewed for the past decade and call it a strategy. Instead, they need to understand how the future of work and employee benefits are now deeply intertwined, and what that means for the decisions they make next.
The Shift in Workplace Expectations and the Future of Work and Employee Benefits
Remote and hybrid arrangements are no longer a perk reserved for a lucky few. According to Gallup, roughly six in ten employees with remote-capable jobs say they want a hybrid arrangement, while about a third would prefer to work fully remote and less than 10% want to be on-site full time. Currently, about 51% of remote-capable U.S. employees are working a hybrid schedule, a number that has held relatively steady even as some employers push for a return to the office.
This shift in where and how people work has changed what they expect from their benefits. Employees increasingly want flexibility, mental health support, and options that reflect their individual circumstances rather than a single package designed for the "average" worker. A single parent balancing childcare, a recent graduate paying off student loans, and an employee nearing retirement all have very different priorities, and a benefits strategy built around the future of work and employee benefits has to account for that diversity. Employers who fail to adapt risk losing talent to competitors who are already rethinking their approach.
Traditional Benefits Models Are Falling Short
Legacy benefits structures were built for a different era of work: one with centralized offices, predictable schedules, and a relatively homogenous workforce. That model is straining under two pressures. First, healthcare costs continue to climb. Second, employees are noticing the gap between what they are offered and what they actually need. Plans typically offer little flexibility and even less transparency. Employers pay a fixed amount regardless of how healthy their workforce is that year, and any savings from lower-than-expected claims stay with the carrier rather than returning to the business. Combined with rising administrative burden, this creates a frustrating cycle: costs go up annually, but the value delivered to employees does not necessarily improve at the same rate.
Level-Funded Health Plans: A Solution for the Future of Work
One of the more promising alternatives gaining traction is the level-funded health plan. This approach combines predictable monthly costs with a structure that allows employers to benefit when actual healthcare expenses come in below expectations. Employers make a consistent monthly payment that generally accounts for expected claims costs, administrative expenses, and financial protection against unusually high claims. If claims come in lower than projected, employers may have the opportunity to receive a surplus refund at the end of the plan year, depending on the plan terms.
This structure fits naturally into a hybrid, data-driven workplace. Level-funded plans can offer greater transparency into claims data, improved reporting, and more predictable monthly budgeting, all while giving employers the flexibility to adjust their benefits strategy as workforce needs evolve. Contrary to a common misconception, these plans aren't limited to large enterprises. Many small and mid-sized businesses are strong candidates, provided they take the time to evaluate their employee population, claims history, and risk tolerance before making a change. Some organizations exploring level-funded arrangements have reported savings in the range of 20% to 40% compared to a traditional plan, though results vary depending on the specifics of the group.
Key Features That Define Modern Employee Benefits
As benefits strategies evolve to match the future of work and employee benefits, a few features have emerged as table stakes rather than nice-to-haves:
Flexibility and personalization: Employees want to choose benefits that fit their life stage, whether that's expanded mental health coverage, fertility benefits, or student loan assistance.
Mental health and wellness support: Access to counseling, employee assistance programs, and wellness resources has moved from optional to expected, particularly as hybrid work blurs the boundaries between home and office.
Affordability and transparency: Employees want to understand what they're paying for and why, not just receive a summary plan description during open enrollment.
Technology-enabled management: Digital tools that let employees compare plans, track claims, and manage their benefits from a phone or laptop have become a baseline expectation rather than a bonus feature.
Employers who build their strategy around these features are better positioned to compete for talent, regardless of company size or industry.
The Role of Data and Analytics in Benefits Strategy
Benefits decisions used to be made largely on instinct or by simply matching what competitors offered. That approach no longer holds up. Employers now have access to claims data, employee feedback, and utilization patterns that can shape a far more precise benefits strategy. Reviewing this data regularly, rather than waiting until the annual renewal, helps employers spot trends before they turn into cost spikes or retention problems.
Analytics also make it possible to measure the return on benefits investments. Instead of assuming a wellness program or expanded mental health benefit is working, employers can track utilization rates and connect them to metrics like absenteeism, turnover, and employee satisfaction. Looking ahead, predictive analytics will play a growing role in helping employers anticipate workforce needs before they become urgent, whether that's an aging employee population requiring different coverage or a younger workforce prioritizing family-building benefits.
Building a Benefits Strategy That Matches How Work Has Changed
The workplace has moved on from fixed schedules and one-size-fits-all coverage, and employee expectations have moved with it. Employers who treat benefits as a static annual renewal rather than an evolving strategy will find themselves increasingly out of step with the talent they're trying to attract and keep. Those who instead invest in flexible, data-informed options, including alternatives like level-funded health plans, put themselves in a stronger position to manage costs while giving employees benefits they actually value. Adapting to the future of work and employee benefits isn't a trend to wait out. It's the foundation of a benefits strategy built to last.
About the Author
Jennifer Schaefer, MBA, ChFC, CLU, RHU, REBC, SHRM-SCP is the Founder & CEO of JS Benefits Group, an employee benefits consulting firm specializing in employee benefits strategy, healthcare cost management, benefits technology and the future of work. Jennifer is a Forbes Business Council Contributor and Co-Host of Executive Leaders Radio, where she shares insights on business leadership, workforce strategy and employee benefits.
Jennifer Schaefer | Founder & CEO, JS Benefits Group
Forbes Business Council Contributor | Co-Host, Executive Leaders Radio | The Future of Work
HOW DO YOU FEEL ABOUT FASHION?
COMMENT OR TAKE OUR PAGE READER SURVEY
Featured
An engagement ring is filled with symbolic meanings.