Workplace healthcare is becoming a strategic pressure point, as employees’ rising demands plus costly medical advances are pushing employers to rethink how far benefits should go and what they mean for resilience.
Healthcare benefits were once viewed primarily as a perk offered by certain sectors or to senior roles, but employees are now demanding faster access to treatment, expanded coverage and access to new medical innovations.
Matthew Gregson, who leads corporate employee benefits at Howden, says expectations have risen sharply. “There’s no doubt in the last five years there’s been a significant increase in employee expectation around access to healthcare in the workplace,” he says. “That access piece is vital, in terms of where do people have available care and what is the right pathway for them to utilise, which starts to bleed into the use of technology and AI.”
This shift reflects broader pressures across healthcare systems, including long waiting times in public services, rising treatment costs and growing awareness of health risks. As a result, organisations are increasingly being asked to step in where traditional healthcare pathways struggle to meet demand.
For employers and risk managers, the question is no longer simply whether healthcare benefits should exist, but how far organisations should go in responding to these expectations.
New expectations: AI, innovation and rising treatment costs
Technological innovation and new medical treatments are shaping employee expectations around workplace healthcare. Advances in diagnostics, remote consultation and treatment pathways are changing how healthcare is delivered, with artificial intelligence increasingly integrated into clinical decision-making.
Gregson explains: “Artificial intelligence is coming more and more into diagnosis and remote consultation and triaging of care. That’s important because it can improve access and the efficiency, quality and cost of care. So, first and foremost, we should all be looking at where we can trust our healthcare providers and their adoption of technology to reduce friction.”
At the same time, medical innovation is also driving new cost pressures. In particular, advanced cancer therapies are becoming dramatically more expensive as new pharmaceutical treatments enter the market. Gregson noted that cutting-edge cancer treatments can now cost between $700,000 and $1m.
These breakthroughs are improving survival rates and expanding treatment options, but they also raise difficult questions for employers about how much of that innovation should be funded through workplace healthcare programmes.
One of the most visible examples of emerging expectations is the rapid rise of GLP-1 drugs for obesity treatment. Demand for these medications has surged globally, prompting debate about whether they should form part of employer-sponsored healthcare benefits.
Gregson says: “There is huge demand for access to GLP-1 weight loss and obesity-related drugs and care pathways in employer plans… I think the problem is we are medicating something that should be about cure and prevention as a chronic condition.”
For organisations, this highlights a broader challenge. Expanding access to innovative treatments can improve employee health outcomes, but doing so may also increase long-term cost exposure if those treatments become embedded within benefits packages.
Healthcare benefits as a retention and recruitment factor
According to Howden’s research, access to strong healthcare benefits is increasingly influencing employee decisions about where to work and how long to stay.
“Nearly two-thirds of people are saying that great healthcare would make them consider staying with their employer longer, and about half of respondents say it would be a factor in looking for a new role. But how much of a factor in recruitment and retention is a very complex, almost unmeasurable outcome,” Gregson explains.
Historically, private medical insurance has been concentrated in certain sectors such as finance, law and professional services. However, expectations are now spreading beyond senior leadership roles into broader segments of the workforce.
Gregson added: “The biggest gap at the moment is in the middle of the workforce – those professional and management roles that start to sit in the higher rate tax bracket where even though that tax is higher, the expectation for medical insurance is greater.”
For employers, this creates a strategic dilemma. Expanding healthcare coverage can strengthen recruitment and retention, but doing so also introduces new cost pressures and expectations that may be difficult to manage over the long term.
The resilience and productivity case for healthcare access
Forward-thinking organisations are increasingly examining healthcare benefits through the lens of operational resilience. Delays in accessing treatment can have a direct impact on productivity, absenteeism and workforce stability. Faster access to care, particularly through private pathways, can significantly shorten recovery times and support earlier returns to work.
Gregson says: “We’re absolutely seeing improved return-to-work pathways and reduced absence as a result of access to quicker care. It’s one of those things, although it’s very difficult to manage and measure in your own data, where we do research like this and it comes out loud and clear.”
For organisations weighing up healthcare investment, the question is therefore not simply cost, but value. Employers must decide whether rising healthcare costs are tolerable and may look at short-term design adjustments to manage spending while maintaining access to essential care.
Among the most significant drivers of demand for healthcare benefits is the growing focus on mental health. Gregson says: “Many employers are seeing mental health increasing costs, and while the actual treatment costs might not be as high as a serious cancer condition, in reality there are other costs to employers through lower productivity and absenteeism.”
A growing strategic challenge for employers
Ultimately, the shift in employee expectations around healthcare reflects a wider transformation in the relationship between work, wellbeing and organisational resilience.
Employers are increasingly expected to support employee health not only through traditional benefits, but also through access to treatment, preventative interventions and emerging healthcare technologies.
The challenge lies in determining where healthcare benefits genuinely strengthen workforce resilience versus where expanding coverage may simply increase long-term cost exposure without addressing underlying health risks.
As expectations continue to evolve, organisations will need to strike a careful balance between supporting employee wellbeing, maintaining financial sustainability and ensuring healthcare strategies remain aligned with broader business priorities.
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