Balancing affordability and employee experience with healthcare benefits
With medical inflation continuing to outpace general inflation and employee expectations rising, employers must take a strategic, detailed approach to ensure their benefit programmes remain sustainable, relevant and valued.
Broadstone’s 2025 Employee Benefits Survey reflects this tension: 47.3% of respondents cited cost pressures, and a further 13.6% specifically highlighted rising UK private healthcare costs as areas of concern.
Healthcare budgets are increasing due to several factors including:
- Medical inflation
- Higher insurer operating costs
- Increasing hospital charges
- A growing reliance on private healthcare as NHS waiting times remain challenged
Demand is growing too. Private Healthcare Information Network (PHIN) reported that private medical insurance (PMI) admissions rose 6% in 2024, a new record level. According to the UK employee benefits landscape report 51% of organisations now offer unlimited outpatient cover (up from 45% in 2023).
And more employers are considering introducing PMI: those with definite plans to introduce PMI rose to 11%, and those considering it increased from 15% to 20%.
This shift is most likely a strategic response to support employee health and wellbeing, maximise productivity and minimise absences.
While costs are increasing, so too are employee expectations for personalised, flexible and holistic healthcare support. REBA's Benefits Trends for 2025 research shows a clear shift toward benefits “marketplaces” designed to support the diverse life stages and needs of employees, from fertility services through to mental health.
A balancing act
To help you balance affordability of healthcare benefits with employee expectations, here are four strategic pillars you should focus on.
1. Data driven design
A sustainable healthcare strategy must begin with robust data. Beyond claims data alone, organisations should combine sickness absence figures, demographic analysis, and utilisation insight from wider benefits to understand their true health risk profile.
UK employees now take 9.4 sick days per year, almost two full working weeks and significantly higher than the pre-pandemic level of 5.8 days, according to the CIPD's Health and Wellbeing at Work (2025) report. Despite this, many employers lack effective day-one absence tracking, meaning root causes are often unidentified.
Accurate data not only highlights trends but supports:
- Targeted benefit design to maximise return on investment
- Evidence based decision making
- Identification of high-risk groups
- Early intervention strategies, many of which may already be embedded within existing benefits
2. Wellbeing and preventative health
A proactive, preventative approach delivers tangible savings and improves employee experience. Data driven wellbeing strategies use real workforce insight - musculoskeletal (MSK) patterns, mental health indicators, demographic risk, utilisation - to target investment where it has the strongest impact.
With rising sickness absence and PMI utilisation, prevention becomes an essential tool. Employers can avoid unnecessary claims inflation by directing employees toward services such as:
- Early mental health support
- MSK physiotherapy and ergonomic interventions
- Digital GP and triage pathways
- Lifestyle and screening programmes
This avoids spending on low impact initiatives and instead directs budgets to proven, measurable interventions.
Read more about workplace wellbeing, prevention and personalisation from Broadstone here.
3. Governance
Governance is often associated with pensions, but it is just as critical within employee healthcare arrangements. Effective governance requires:
- Continuous monitoring of performance, cost, and utilisation trends
- Regular review of benefits to ensure alignment with employee needs
- Prevention of duplication, especially as many insurers include significant added value services
- Adaptation of benefit design to changing workforce needs and risk trends
Given the wide range of services, from mental health support to virtual MSK pathways, regular cross-referencing helps ensure you are using the best value services already available within your existing arrangements.
4. Technology and flexible benefits platforms
Modern flexible benefits platforms have evolved significantly, with far lower cost barriers than historically associated. Implementing a digital platform is now one of the most effective ways to balance affordability with personalisation in healthcare benefits.
A flexible benefits platform such as Flexcel enables:
- Employee choice, allowing individuals to tailor benefits to their own needs
- Reduced employer administration, lowering annual operational costs and resource hours
- Simplified communication, improving understanding and engagement
- Early intervention, via integrated digital tools
- Straightforward provision of voluntary benefits, offering expanded choice without increasing employer cost
- Data driven insight, guiding benefit design and future strategy
A modern platform is not simply a delivery mechanism. It is a strategic investment that enhances workforce health, productivity and long-term cost control.
Read more about benefits technology reshaping business strategy from Broadstone here.
Your best practice pathway
So, what specific steps can you take to make sure you have a sustainable, future-proofed healthcare strategy that balances employee needs and costs?
Here are some recommendations:
- Audit and analyse: Use multiple data sources including claims, sickness absence and demographics to inform decision making. Implement robust Day1 sickness absence tracking to enable early intervention.
- Tailor and tier: Combine employer funded core healthcare benefits with voluntary (employee funded) upgrades delivered through a flexible benefits platform. Consider health cash plans, which can be a lower cost option to reduce absenteeism and improve productivity.
- Embed preventative tools: Early intervention allows for treatment before it become serious. Integrate health screenings, digital mental health pathways and MSK support to demonstrate care, reduce long-term costs, and improve productivity.
- Educate and nudge: Use digital platforms, AI decision aids and clear, targeted communication to improve employee understanding and benefit utilisation.
- Review and optimise: Work with an employee benefits adviser like Broadstone to assess claims trends, cost pressures, absence rates and employee feedback — ensuring your benefits programme evolves appropriately. Consider your adviser as a strategic partner, helping you align benefits with your company’s goals and employee needs.
Final thoughts
Balancing affordability with employee experience is entirely achievable with healthcare benefits. Through targeted governance, smart benefit design, and the strategic use of data and technology, employers can deliver cost-efficient healthcare programmes that genuinely enhance the employee experience.
This balanced approach strengthens retention, supports workforce wellbeing, and builds organisational resilience at a time when effective healthcare strategy has never been more important.
Connect with us so we can explore what a smarter, more resilient healthcare strategy could look like for you.
Supplied by REBA Associate Member, Broadstone
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