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"HRAs"/
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HRAs Can Help Your Staff Pay for Medical Expenses

by Inoventive Solutions
April 28, 2026

As rising health insurance premiums and out-of-pocket costs for health care are burdening workers, more employers are looking for ways to help their staff put aside money for those expenses.

While health savings accounts have grown in popularity, you can only offer them to employees who are enrolled in high-deductible health plans. Fortunately, there is another option: a health reimbursement arrangement (HRA).

Employers fund these accounts, which reimburse your staff for qualified medical expenses and, in some cases, insurance premiums.

You can claim a tax deduction for the funds you transfer to your employees’ HRAs, and the funds they withdraw from the accounts to reimburse for medical-related expenses are generally tax-free.

Unlike HSAs and flexible spending accounts, though, HRAs are solely funded by employers. Also, unlike HSAs, they are not portable if an employee moves to a new employer.

In addition, federal regulations dictate what types of health care expenses HRAs can reimburse, and those rules vary depending on the type of HRA you offer.

Depending on the type of HRA, funds may be used to reimburse:

  • Health insurance premiums,
  • Vision and dental insurance premiums,
  • Coinsurance, copays and out-of-pocket medical outlays, and
  • Qualified medical expenses.

How HRAs work

You decide how much you want to fund your employees’ HRAs. You can fund them in one lump sum. Under federal regulations, you must fund all like employees’ HRAs with the same amount. So, if you have 12 sales reps, each one would have to get an HRA funded with the same amount, but managers and supervisors could receive a different sum.

Employees can only withdraw funds from their account to reimburse them for a legitimate expense they have already paid for. Another option is to provide them with an HRA debit card, which they can use to pay for qualified medical expenses.

Once they have depleted the funds in their HRA for the year, they have to pay for medical expenses out of pocket.

Any HRA money that is unspent by year-end may be rolled over to the following year, although an employer may set a maximum rollover limit that can be carried over from one year to the next.

Expenses HRAs can’t cover:

  • Maternity clothes,
  • Gym membership fees,
  • Marriage counseling, and
  • Childcare.

Rules differ from one HRA to another and there are a number of different HRAs:

Integrated HRA — This type of HRA requires employees to also be covered by a group major medical plan. It generally reimburses out-of-pocket medical expenses.

Dental/vision HRA — This type of HRA limits reimbursements to only dental and/or vision expenses.

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)  — This type of HRA is only available to employers that have fewer than 50 employees. The maximum annual reimbursement amount is $5,450 for self-only employees ($454.16 per month) and $11,050 for employees with a family ($920.83 per month).

QSEHRAs are typically used to (legally) allow employers to reimburse their workers for individual health insurance premiums, in addition to other out-of-pocket expenses being reimbursed.

Individual Coverage HRA (ICHRA) — This type of HRA is available to employers of all sizes, and employees must be covered by an individual health insurance plan to be eligible.

The primary intent of the ICHRA is to allow for the reimbursement of individual health insurance premiums, but other out-of-pocket expenses, such as copays and deductibles, can also be reimbursed. 

ICHRAs have only been around since January 2020 thanks to a law that allowed HRA funds to be used to pay for individual health insurance premiums.

Employees can use these HRAs to buy their own comprehensive individual health insurance with pretax dollars either on or off the Affordable Care Act’s health insurance marketplace.

Excepted Benefit HRA (EBHRA) — This HRA will allow for the reimbursement of COBRA premiums, short-term medical plan premiums, dental and vision expenses. The annual reimbursement limit for an EBHRA is $1,800 (adjusted for inflation).

The takeaway

There are a variety of HRAs that let you help your employees pay for their health care expenses. These valuable savings vehicles give both your organization and your staff a tax break on the funds, and they are another tool in helping you retain and attract talent.

In fact, you can even pair an HRA with an HSA, as long as the HRA is HSA-qualified.  

In these instances, you would need to offer a “limited-purpose HRA” that only reimburses employees for expenses that are exempt from the HSA deductible requirement.

These expenses are:

  • Health insurance premiums
  • Long-term care premiums
  • Dental expenses
  • Vision expenses.
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New PBM Rules Raise Compliance Stakes for Employers

by Inoventive Solutions
April 21, 2026

Employers that sponsor health plans will face a new layer of compliance risk under the Consolidated Appropriations Act of 2026, which imposes sweeping transparency and reporting rules on pharmacy benefit managers (PBMs).

The law aims to open up the “black box” of prescription drug pricing, but it also puts both self-insured and fully insured employers closer to the compliance line, with potential civil monetary penalties that can reach $10,000 per day for reporting failures and $100,000 per violation for knowingly providing false information.

At the core of the law are three major requirements that directly affect how employer health plans interact with PBMs:

  • Full rebate pass-through: PBMs must pass 100% of rebates, discounts and other compensation back to the health plan.
  • Detailed reporting: PBMs must provide semiannual reports outlining drug spending, utilization and compensation structures.
  • Audit rights: Plan sponsors have the statutory right to audit PBM records at least annually.

These provisions are designed to give employers clearer insight into prescription drug costs, but they also create new fiduciary responsibilities.

How this affects employers

Self-insured employers, which contract directly with PBMs, will feel the most immediate impact. They must ensure they receive required reports, review them and make summary information available to plan participants. They must also document compliance efforts.

Employers that purchase fully insured plans are not off the hook. While carriers and PBMs handle much of the administration, the law still applies to the plan sponsor in certain cases, particularly around participant disclosures and ensuring compliance upstream.

The law does not clearly assign liability for penalties in all situations. As a result, PBMs and insurers may attempt to shift risk to employers through contract language.

Specifically, some PBM agreements may include indemnification provisions that require the employer to cover penalties — even if the PBM failed to meet its reporting obligations.

New risks

Employers should pay close attention to several emerging risks:

  • Contractual liability: PBMs may try to transfer penalty exposure to plan sponsors.
  • Reporting gaps: Failure to obtain or share required data could trigger fines.
  • Notice requirements: Employers must inform plan members about available prescription drug data.
  • Fiduciary exposure: Plan sponsors must act prudently in overseeing PBM arrangements.

Employers may avoid penalties if they can demonstrate a “good faith effort” to comply. That makes documentation critical.

What employers should do now

With most provisions taking effect in 2029 for calendar-year plans, employers have time to prepare:

  • Review PBM contracts and renegotiate any indemnification clauses that shift compliance risk.
  • Establish a compliance process to retain PBM reports and allow employees to request copies.
  • Keep records of communications and efforts to obtain required data.
  • Ensure summary benefit information and required notices include information on the new law.
  • Work with us to better understand compliance issues.
  • Notify participants about their right to access PBM plan-level summary data. We can help you integrate this into your next open enrollment or summary plan documents update.

Why this matters

The new PBM mandates are intended to reduce drug costs and improve transparency, but they also introduce a compliance burden that many employers are not equipped to handle alone.

Employers should not assume their PBM or insurance carrier is managing all aspects of compliance. Ultimately, plan sponsors bear fiduciary responsibility for their health plans.

That makes it critical to work closely with a knowledgeable benefits advisor like us who can help review contracts, interpret reporting requirements and ensure that your plan remains compliant as these rules take effect.

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Delayed Care Fuels Chronic Conditions, Drives Health Plan Costs

by Inoventive Solutions
April 14, 2026

During the last three years, a new driver of health plan costs has emerged: a growing share of employees are postponing doctor visits, screenings and even medications until conditions worsen.

Instead of early, lower-cost intervention, employees are entering the system later and sicker. This is fueling more catastrophic claims, higher utilization of emergency services and ultimately higher costs for employer-sponsored plans.

Across the country, providers report more late-stage diagnoses and unmanaged chronic conditions. When symptoms become severe, they often require more intensive treatments that drive up costs, including:

  • Hospitalization,
  • Specialist care,
  • Advanced imaging and
  • Expensive drug regimens.

Delayed care domino effect

The reasons for this trend are well documented. A survey by the Employee Benefit Research Institute found that four in 10 privately insured adults report higher health care costs. At the same time, polling by KFF found that 36% of adults say they have skipped or postponed needed care due to cost, and about one in five have not filled a prescription for the same reason. 

High-deductible health plans are a major factor. While they can help control premiums, they also require employees to pay sometimes thousands of dollars out of pocket before coverage begins. That financial exposure can lead workers to put off care, particularly if they are unsure whether a visit is necessary.

Medication non-adherence is another driver. About one-third of adults report skipping doses or delaying prescriptions due to costs, according to KFF. This can worsen chronic conditions and lead to hospitalizations that could have been avoided with consistent treatment.

What employers can do

  • Lower financial barriers to preventive care — Waive or reduce cost-sharing for primary care visits, screenings and chronic condition management.
  • Promote and simplify primary care access — Offer telehealth, onsite or near-site clinics and easy scheduling to reduce friction.
  • Educate employees on how their plans work — Many workers do not fully understand deductibles, health savings accounts or covered services, which can lead to unnecessary delays.
  • Encourage medication adherence — Consider programs that reduce or eliminate costs for essential medications tied to chronic conditions.
  • Use data to identify gaps in care — Analyze claims to find employees who are missing preventive services or managing chronic conditions poorly.
  • Steer employees to high-value providers — Offer insurance from carriers that offer networks or incentives that guide workers to high-quality, lower-cost settings for procedures and treatments.
  • Leverage wellness and condition management programs — Programs that help employees manage diabetes, musculoskeletal issues or cardiovascular health can improve outcomes and reduce long-term costs.

Employers have more influence than they may realize in addressing delayed care. The goal is to reduce barriers and make it easier for employees to access care early.

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Employers Should Make Employee Health Care Literacy a Top Priority

by Inoventive Solutions
April 7, 2026

For many U.S. workers, health insurance remains confusing, intimidating and underutilized. Despite the billions employers spend on benefits each year, a large share of employees does not fully understand how their coverage works or how to use it effectively.

According to a report by Aflac, only 38% of employees said they understand everything about their benefits, suggesting that most workers need more guidance on how their coverage works. When employees lack health care literacy — the ability to find, understand and use health information and services — they are more likely to delay care, make poor medical decisions and incur unnecessary costs.

For employers, that translates into higher claims costs, lower productivity and frustration with benefit programs.

Improving health care literacy can deliver measurable benefits. The Centers for Disease Control and Prevention has estimated that better health literacy could prevent nearly 1 million hospital visits annually and save more than $25 billion in health care costs.

The cost of confusion

Employees who do not understand their benefits often:

  • Use out-of-network providers unnecessarily.
  • Choose higher-cost care settings, like emergency rooms for non-emergencies.
  • Skip preventive care that could head off more serious conditions later.
  • Misinterpret bills or fail to challenge incorrect charges.

These behaviors drive up employer-sponsored plan costs and can also lead to more absenteeism and presenteeism.

Open enrollment is not enough

Many employers concentrate their communication efforts during open enrollment. While important, that once-a-year push is not enough to build true understanding.

Employees make health care decisions year-round, like when they schedule a test, fill a prescription or choose where to seek care. Without ongoing education, even well-designed benefit plans can go underutilized and employees may make costly choices.

Employers that take a continuous approach to education are more likely to see employees engage with their benefits and make smarter decisions.

Practical ways to build health care literacy

Employers do not need to overhaul their benefits strategy to make progress. Small, consistent steps can have a meaningful impact:

  • Use plain language. Rewrite benefit materials to eliminate jargon and explain key terms like deductibles, copays and coinsurance in simple terms. Aim for a sixth- to eighth-grade reading level.
  • Educate year-round. Provide monthly or quarterly communications that focus on one topic at a time, such as preventive care, telemedicine or how to read an explanation of benefits.
  • Show real-world examples. Compare costs for common scenarios like urgent care vs. emergency room visits so employees see the financial impact of their choices.
  • Promote in-network savings. Use visuals or tools that highlight how much employees can save by staying within network providers.
  • Leverage multiple channels. Combine e-mail newsletters, intranet content, webinars and short videos to meet employees where they are.
  • Offer decision support. Provide access to benefits counselors, either in person or virtually, to help employees choose plans and understand coverage.
  • Encourage preventive care. Regular reminders about screenings, vaccinations and annual checkups can reinforce healthy behaviors and reduce long-term costs.
  • Use data to guide efforts. Review claims trends and employee questions to identify where confusion is highest, then tailor education accordingly.

Build trust and engagement

Employers that invest in health care literacy often become a trusted source of information for their workforce. That trust can increase participation in wellness programs, improve satisfaction with benefits and strengthen retention.

It also aligns with a broader shift in how employees view their benefits. Workers increasingly expect guidance and want help navigating a complex system. Fortunately, employers are well positioned to provide it.

"benefits"/
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Flexible Benefit Plans Give Employees More Options

by Inoventive Solutions
March 31, 2026

One way you can give your staff more choice in the employee benefits they receive is to offer them a cafeteria plan, which allows them to put together a benefits package that works best for them.

Employers fund these flexible benefit plans with funds that are deducted from their employees’ salaries on a pre-tax basis. Since the salary reductions are not received by the employee, they are not considered wages for income tax purposes.

Cafeteria plans are particularly good for participants who have regular expenses related to medical issues and childcare.

The worker can choose from a menu of options into which they want to funnel the funds, and how they want those funds allocated. Options can include:

  • Health insurance,
  • Voluntary benefits premiums (like vision and dental),
  • Life insurance,
  • 401(k), and
  • Flexible spending account.

Besides the fact that your employees use money that hasn’t been taxed to pay for these benefits, the payroll deductions for them also reduce their taxable income while raising take-home pay.

A cafeteria plan is especially attractive because it lets them choose which benefits they want. This is great since one size does not fit all in the world of employee benefits.

Set-up and tax implications

Cafeteria plans are also called Section 125 plans because they were created by Section 125 of the IRS Code.

When a plan is created, the benefits are available to employees, their spouses, and their dependents. Depending on the circumstances and details of the plan, Section 125 benefits may also extend to former employees, but the plan cannot exist primarily for them.

Section 125 plans offer a number of tax-saving benefits for employers. For each participant in the plan, employers save on the Federal Insurance Contributions Act (FICA) tax, the Federal Unemployment Tax Act (FUTA) tax, the State Unemployment Tax Act (SUTA) tax, and workers’ compensation insurance premiums.

Combined with the other tax savings, a Section 125 plan usually funds itself because the cost to open the plan is low.

Also, it’s estimated that participating employees can save 20% to 40% of every dollar put into the plan. The employee chooses how much they want to put into the plan each year and this is deducted from their paycheck automatically for each payroll period.

Remember: Flexible benefit plans are not without their drawbacks. But if you want to attract and retain key personnel with competitive benefit packages while keeping your own costs low, they can be an attractive alternative to standard benefit plans.

Call us for more information on how you can set up a flexible benefit plan for your staff.

There are several types of flexible benefit plans, including cafeteria plans and flexible spending accounts.

Flexible spending accounts

An FSA lets your employees pay for medical-related expenses and dependent care that may not be covered by their health plan. They can later use these funds to pay for an array of expenses such as:

  • Out-of-pocket medical costs,
  • Acupuncture, chiropractic services and the like,
  • Medical equipment,
  • Day-care provider fees,
  • Elder care.

Also, employers can allow the employee to carry over a portion of the funds in an FSA to the first few months of the next year. The maximum permitted carryover amount is $550.

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A Multi-Generational Approach to Employee Benefits

by Inoventive Solutions
March 24, 2026

Open enrollment season can feel like a familiar ritual: publish the guide, send a few e-mails, hold one webinar and hope employees make good choices. But when employers take a one-size-fits-all approach to benefits design and communication, they often leave participation, satisfaction and retention on the table.

The modern workforce spans four generations, each shaped by different life stages, financial pressures and comfort levels with technology. That means the same benefits message and enrollment experience will land differently depending on who is receiving it. Recent surveys have found benefits satisfaction has slipped, suggesting expectations are rising faster than many programs and communications are evolving.

Benefits are complex, personal and often tied to major life decisions. When communications are too generic or the enrollment process feels frustrating, employees may tune out, postpone decisions or default to last year’s elections even when their needs have changed.

The employers that win on engagement typically do three things well:

  • Segment the workforce — Generation, life stage, family status, career stage, location and role
  • Offer multiple ways to learn — Digital, live and self-serve
  • Make the experience easy — Clear choices, fewer clicks and fast answers

Baby boomers

Boomers are often focused on retirement readiness, health care coverage and protecting income. Many are already of retirement age but choose to keep working. They typically appreciate a personal touch and time to digest information before making decisions.

  • Offer live Q&A sessions and phone-based support during enrollment.
  • Provide clear comparisons of medical plan costs, networks and coverage.
  • Highlight catch-up retirement contributions and step-by-step retirement planning resources.
  • Pair complex choices (Medicare coordination, supplemental products and long-term care options) with one-on-one counseling.

Generation X

Gen X employees often juggle competing responsibilities, including kids and aging parents. They tend to value autonomy, straightforward information and tools that respect their time.

  • Use concise e-mails and one-page summaries that link to more details as needed.
  • Offer self-serve decision tools for health plans, FSAs and disability coverage.
  • Emphasize financial protection benefits (life, disability and critical illness) in plain language.
  • Provide flexible office hours for short calls, not long meetings.

Millennials

Millennials commonly look for flexibility and benefits that support evolving family and financial needs. They are comfortable with digital enrollment but still want clarity and proof of value.

  • Build mobile-friendly enrollment processes with short videos and brief explainers.
  • Spotlight flexibility-related benefits such as remote options, caregiving support and paid leave when applicable.
  • Promote financial wellness resources, student loan support or budgeting tools if offered.
  • Tie benefits to career growth, such as tuition support, certification reimbursement, mentorship and internal mobility.

Generation Z

Gen Z is highly responsive to technology-driven experiences and expects speed, transparency and easy access. They also tend to prioritize mental well-being and want information in short, visual formats.

  • Use text message-style reminders, in-app nudges or chat-based help if possible.
  • Provide bite-size content like short videos, FAQs and simple “what it covers” flyers.
  • Make mental health benefits easy to find and use, including EAP access and digital options.
  • Offer guided enrollment portals for those new to employee benefits, including definitions and examples.

Execution

A workable multigenerational strategy does not require building four separate benefits programs. Start by updating how workers access, understand and use existing benefits.

  • Survey and listen: Ask employees what they use, what confuses them and how they prefer to receive information.
  • Offer “digital plus human”: Keep digital enrollment simple but back it up with real-time support for complex questions.
  • Measure what matters: Track participation by benefit type, access methods, call center volume and common questions. Then refine communications year-round.
  • Segment by life stage, not just age: Family status, health needs and financial stress often predict benefit priorities better than age alone.

When employees can engage with benefits in ways that fit them best, enrollment tends to rise, confusion drops and benefits become a more visible driver of satisfaction and retention.

"No
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No Surprises Act Is Failing and Driving Health Plan Costs

by Inoventive Solutions
March 10, 2026

A coalition of more than 60 employer groups, insurers, patient advocacy organizations and labor groups is urging the federal government to crack down on what they say is widespread abuse of the arbitration process created under the No Surprises Act.

In a Feb. 24, 2026 letter to the U.S. Departments of Treasury, Labor and Health and Human Services (HHS), the organizations asked the Trump administration to tighten oversight of the law’s independent dispute resolution system. The groups argue that the process, which was designed to settle payment disputes between insurers and out-of-network medical providers, is being manipulated in ways that increase health care costs.

A study cited in the letter found that the IDR process generated at least $5 billion in wasteful spending between 2022 and 2024, including administrative fees and arbitration awards that far exceed typical market rates.

How the No Surprises Act works

The No Surprises Act took effect in 2022 and was designed to protect patients from unexpected medical bills. Before the law, patients could receive large bills if they unknowingly received care from out-of-network providers (for example, an out-of-network anesthesiologist at an in-network hospital).

The law prohibits providers from billing patients for these unexpected charges. Instead, insurers and providers must negotiate payment for the service. If they cannot reach an agreement within 30 days, either side can initiate the IDR arbitration process.

Congress intended the process to serve as a limited backstop for resolving occasional disputes, but it has evolved into something far larger.

Federal regulators originally estimated that about 17,000 disputes would enter arbitration each year. Instead, more than 3.3 million disputes were filed between mid-2022 and May 2025, according to a study published in Health Affairs.

Act is a new cost driver

The Office of the Assistant Secretary for Planning and Evaluation, a division of HHS, issued a report in 2026 that found the act is driving up costs for health plans, payers and patients. It found that:

  • About 85% of the disputes that flowed through the system in 2023 involved participants in health plans sponsored by private employers.
  • IDR reviewers took an average of 91 days to handle disputes, and some took more than 300 days to close some disputes.
  • The reviews cost an average of $445 each.
  • The reviewers sided with providers in hospital care cases 80% of the time.
  • When reviewers sided with the providers, they awarded significantly higher payment rates. For example: For colonoscopy anesthesia, health insurers paid providers an average of $300 in 2023. When an IDR reviewer handled a dispute involving the procedure, it awarded an average payment of $1,252.

What the coalition wants

Industry analysts say the growing use of arbitration is already creating new affordability pressures for employer health plans and their employees through higher premiums, deductibles and cost-sharing.

In their letter, the groups urged federal regulators to take several steps to restore the arbitration system to its intended purpose.

They recommended that the agencies:

  • Strengthen enforcement to ensure only eligible claims enter the IDR process.
  • Require arbitrators to explain decisions that deviate significantly from benchmark payment levels.
  • Increase transparency around arbitration outcomes.
  • Penalize providers that repeatedly submit ineligible claims.

The coalition argues that stronger oversight is necessary to ensure the No Surprises Act continues protecting patients without unintentionally driving up health care costs for employers and their workers.

"Umbrella
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Are Your Benefits Enough to See Employees Through a Crisis?

by Inoventive Solutions
March 3, 2026

Middle-class families — those with incomes of between roughly $50,000 and $180,000 per year (depending on where they live) — are becoming increasingly reliant on workplace benefits to ensure their financial well-being in case of a disability or critical illness.

Simple health insurance is insufficient to carry the load. The loss of a breadwinner’s or caregiver’s financial contribution through death or disability is often devastating.

A recent survey by benefits provider Guardian indicates that families in this category are struggling when it comes to achieving their financial goals. Of those workers surveyed only half believe they would be able to manage if the household lost an income due to death or illness.

Caught in the middle

Families with incomes significantly above $100,000 per year are generally able to create at least some financial cushion against the possibility of death or disability. They also receive a good deal of advice from financial advisors, accountants and insurance agents in managing their financial affairs. 

Working class families – those with incomes below about $50,000 – are often able to access various parts of the social safety net in times of crisis.

The “middle market,” in contrast, must make do without the advantages of the more affluent, with fewer privately owned insurance products and services, and without the same access to the social safety net afforded to working-class families.

Workplace benefits are critical 

According to Guardian’s researchers, the middle-market population is overwhelmingly reliant on the quality and breadth of the benefits they receive at work, over and above cash compensation.

Over 80% of middle-market respondents report that they got their health insurance, disability insurance and retirement plan all through their employer.

Meanwhile, six in 10 have no life insurance in place outside of the workplace. This means that the solid majority of working families are relying entirely on workplace benefits to see them through the death of a family breadwinner.

And in the event of disability ending a breadwinner’s income, the situation is even more dire: Only 7% of the middle market owns any kind of disability insurance protection, outside of what they can access via their employer.

Are life insurance benefits adequate? 

For young families, the primary role of life insurance is to replace the income of a deceased breadwinner. But many employers cap life insurance benefits at $50,000 — the maximum figure that allows employers to deduct premiums as a workplace benefit under IRC 7702.

The actual need for many of these families is several hundred thousand to a million dollars, and occasionally more. That’s what it takes to replace the income of a worker who earns $50,000 to $100,000 per year until the children are out of college and a surviving spouse is taken care of.

The cap on group life insurance is often not enough to help a family who loses their breadwinner, and the coverage should be considered a stopgap for a more robust life insurance policy purchased in the private market. 

What employers can do

One solution is to offer voluntary benefits to workers. These include a menu of benefits, such as:

  • Group life insurance
  • Group disability insurance
  • Long-term care insurance
  • Critical illness coverage

Often, many of these benefits can be offered at little or no cost to the employer. 

Premium costs are simply deducted from the worker’s wages and forwarded to the insurance company via payroll deduction. In this way, workers can purchase much more coverage and provide protection for their families – and it doesn’t cost the employer a dime.

In some instances, it can even save on payroll taxes.

To learn more, call us. 

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More Employers Offer Caregiver Leave as Need Mounts

by Inoventive Solutions
February 24, 2026

A new survey found that many employers plan to add or expand caregiver leave as they contend with workforce burnout, changing family dynamics and competition for talent.

According to WTW’s “2025 Absence, Disability and Medical Leave Survey,” caregiver leave is expected to see the fastest growth of any leave benefit over the next two years, despite only a handful of states requiring it by law. The shift comes as caregiving demands intensify across a multigenerational workforce. Many employees juggle work while caring for aging parents, children or other dependents, often with limited financial or workplace support.

Employers are finding that caregiver leave can help reduce stress and burnout, improve morale and productivity and support retention in a tight labor market where replacing workers is increasingly expensive.

What the WTW survey found

  • 73% of employers plan to enhance leave programs over the next two years.
  • 39% of employers expect to offer caregiver leave within two years, up from 22%.
  • Employers cite improving employee experience (67%) and strengthening attraction and retention (60%) as the top reasons for expanding leave benefits.
  • 49% of employers identify leave program administration as their biggest challenge, followed by system integration and workforce coverage.

The importance of caregiver leave

Caregiver leave addresses a growing gap for a workforce that increasingly spans multiple generations. Nearly one quarter of U.S. adults are part of the so-called “sandwich generation,” caring for both children and aging parents, according to another report. These employees often provide about 20 hours of unpaid care per week and may spend $10,000 to $11,300 a year out of pocket to support family members.

Although caregiver leave may qualify under the Family and Medical Leave Act (FMLA), it is typically unpaid unless employers offer wage replacement. That financial strain can increase stress and burnout, pushing some caregivers to reduce their hours, change jobs or leave the workforce entirely.

From a business standpoint, caregiver leave can help mitigate turnover risk. Replacing an employee can cost about 30% of annual pay. While caregiver leave will not eliminate turnover, it can lower the risk that employees leave because of caregiving responsibilities.

How employers can implement caregiver leave

Employers considering caregiver leave often start by integrating it into their existing leave or paid time off structures.

Common approaches include offering a defined number of paid leave days per year, allowing caregiving use of banked personal time off or layering caregiver leave on top of state paid family leave programs.

Best practices include:

  • Defining caregiving broadly to cover children, parents, spouses, domestic partners and other dependents.
  • Coordinating caregiver leave with FMLA and state programs to avoid duplication and ensure compliance.
  • Setting clear eligibility and documentation standards while keeping the process simple for employees.
  • Training managers to handle workload planning and employee conversations.

Overcoming administrative and operational challenges

Administration remains one of the biggest barriers to expanding caregiver leave. Challenges include coordinating multiple leave programs, maintaining multistate compliance and managing staffing as leave usage increases.

To address these issues, many employers are:

  • Outsourcing leave administration to specialized vendors.
  • Standardizing policies and systems across locations.
  • Using technology to support routine leave management.
  • Monitoring utilization to ensure caregiver leave is accessible and free of stigma.

The takeaway

As caregiving responsibilities continue to affect a growing share of the workforce, caregiver leave is emerging as a practical, targeted benefit that supports employees while helping employers attract and retain talent in a competitive labor market.

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Voluntary Benefits Lawsuits Add Fiduciary Concerns for Employers

by Inoventive Solutions
February 3, 2026

Plaintiff’s lawyers are breaking new ground by suing employers for allegedly failing in their fiduciary duties to manage their voluntary benefit plans, including dental, vision, accident insurance, critical illness, cancer and hospital indemnity benefits.

These class action lawsuits typically allege that employers exercise sufficient control over these plans to trigger fiduciary duties under the Employee Retirement Income Security Act (ERISA) and that those duties were breached. Once ERISA applies, employers can face claims tied not just to plan design, but to the prudence of benefit selection and monitoring.

If these lawsuits gain traction, they may open a new category of potential liability tied to benefit offerings that many employers have historically overlooked.

At the center of the litigation is the claim that certain voluntary benefit arrangements are not exempt from ERISA, either because they fail to meet the voluntary plan safe harbor or because employers exercise sufficient control to trigger fiduciary duties.

Five areas drawing scrutiny

Four recent class action lawsuits filed against large employers include similar allegations that the employers and their benefits brokers breached ERISA fiduciary duties by allowing excessive commissions, failing to monitor insurers and brokers and engaging in conflicted arrangements within employer-sponsored voluntary benefits programs.

Each of these companies was sued by an employees’ union benefit or welfare plan:

  • United Airlines
  • Laboratory Corporation of America
  • Community Health Systems
  • Allied Universal

Key areas of alleged exposure include:

1. Benefits selection processes — Employers are being accused of failing to run competitive requests for proposals, benchmark offerings or document why certain carriers or products were chosen. A casual selection process that keeps the same plan each year can be portrayed as imprudent once fiduciary standards apply.

2.  Contracts — Agreements with insurers, brokers and enrollment vendors are under the microscope. Vague terms, unclear delegation of responsibilities or contracts that fail to spell out fiduciary status can make it harder for employers to defend their role as plan sponsors.

3. Broker and vendor compensation provisions — Embedded commissions, overrides and incentive payments are a central theme in the lawsuits. Plaintiffs argue that employers failed to monitor compensation levels or allowed conflicted arrangements that inflated employee premiums.

4. Premium levels — Even when employees pay the full cost, plaintiffs contend that employers must ensure premiums are reasonable relative to the benefits provided. A lack of benchmarking can be framed as a breach of the duty of prudence.

5. Insurance product loss ratios — Loss ratios are being used as a proxy for value. Low ratios may be cited as evidence that plans were overpriced or structured to favor intermediaries rather than participants.

Steps employers can take

While none of these cases has been decided on the merits, they send the message that voluntary benefits are no longer viewed as litigation-proof. Employers and HR leaders may want to consider:

  • Confirming whether each voluntary benefit arrangement is intended to be ERISA-covered or exempt — and documenting that determination.
  • Reviewing contracts to clarify fiduciary roles, responsibilities and delegation.
  • Increasing transparency around broker and vendor compensation, including commissions and incentives.
  • Benchmarking premiums and insurer loss ratios against the broader market.
  • Documenting benefit selection decisions and the rationale behind them.
  • Strengthening employee decision support and education to demonstrate a focus on participant outcomes.

Voluntary benefits may remain optional for employees, but the lawsuits suggest fiduciary oversight is becoming less optional for employers. Employers that pay closer attention now to ensure compliance with any applicable fiduciary duties can reduce their risk of becoming the next test case.

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