Welcome to Insider Insights where we dive into hot topics facing the financial services industry. We're excited to have with us Pat Leary, Corporate Vice President of Workplace Benefits Research at LIMRA and LOMA, and today we’re diving into a topic that’s quickly becoming a top priority for employers, brokers, and benefits providers alike — absence and leave management.
It’s no longer just a compliance checkbox — it’s a strategic challenge and a massive opportunity. In this episode, we’ll unpack new research from LIMRA and LOMA’s 2025 Harnessing Growth in Workforce Benefits study, revealing how leave programs are evolving, why employers may be underestimating the complexity, and what brokers are seeing on the front lines.
So, as we did our research of employers, employees, and brokers, we uncovered a number of takeaways. Number one — leave management demand is rapidly growing.
Second, leave types are rapidly multiplying.
Next, and this is really interesting, confidence levels are mismatched across the employers and the brokers, and we'll touch on that.
Next, employers are willing to pay more for integrated experiences around absence and leave management services. But we believe this growing complexity is going to drive higher leave outsourcing in the future.
And lastly, it's about “show me.” Capabilities matter and are saying “show me.” Nevertheless, one of the things that came through loud and clear is everything around absence and leave is consuming so many resources It's consuming mindshare. And so, it's almost like taking away from conversations about other benefits.
And so, this next horizon is emerging and has now become a burning platform. So, let's talk a little bit more about each of those takeaways.
So the need for lead management and related services is rapidly growing? It's really driven from a couple of different perspectives. There's definitely a desire for employers, especially in a hot labor market, to address a wider and more contemporary range of needs. There's just a lot of regulatory and compliance issues, as more and more states are rolling out mandated leave requirements.
But here, in our surveys, we found that 38 percent of employers report they've seen an increase in absences since implementing a mandated leave program, and that number jumps to 48 percent among larger employers. Our worker survey asked those who had experienced a leave how they found the process of applying for the leave, filling out the paperwork, the return-to-work experience, etc., the kind of soup=to-nuts of the complete experience. And just 24 percent found the leave experience to be very easy. So, there's really significant room for improvement when it comes to the worker experience of absence and leave.
And we also found from the employer survey that more than half of employers said they purchased insurance to provide paid family leave coverage in those states where it's allowed. In addition, another 35 percent said they were considering it.
Clearly, leave management demand is growing.
Another consideration we explored is what types of leaves are employers looking at? Given the evolution of demographic trends, social trends, et cetera, employers are trying to provide diverse offerings when it comes to leave to meet the needs of the changing workforce.
Take a look at paid caregiving leads, so we see a lot of that, you know, with people who have caregiving responsibilities, particularly for elder parents, but some of the other things that we see there really expanding around, you know, to try to address, you know, a wider range of leaves to meet the needs of a more contemporary work force. But even, you look at some that are more that are, you know, more employers currently offer, right, paid parental, maternity, etcetera, in company sponsored paid family or medical leave, within the next three to five years, just about all employers are going to be offering these types of leaves.
So, think about the challenges that it has, you know, for organizations trying to manage that. How does that change your conversations with your clients around leaves and what they're trying to do with their employees? But just to peel back the onion a little bit more, we see, particularly among small employers, right? So small employers that, you know, just when you look across the range, they tend not to offer currently as many leave options as others, as the larger firms, but we find that more than half of small employers are planning or considering to offer three or more additional leave offerings in the next several years.
So, 56 percent, they're planning or considering offering a company sponsored paid caregiving leave. Another 49 percent say they're going to be offering a non-FMLA medical leave benefit.
We see that fifty eight percent of employers they, you know, are looking to offer paid leave benefits that create parity for all workers regardless of geography. So, with each state having different requirements and different nuances to their plans, when an employer is operating in multiple states, this creates a challenge for how we create parity or do we offer different types of leave. So, for those employers that do tend to have operations in like five or more states, fifty eight percent lower, they're trying to do something, a little bit more unique.
Thirty seven percent are saying that they're considering changing their paid leave policies to accommodate intermittent or reduced schedule leave. So that's, you know, another challenge that employers face. What happens if you have someone for one event, call it, but it's like a recurring condition, right? How do you manage that?
How do you manage schedules around that, right? So, right now, 59 percent currently accommodate intermittent, and of those who do not, it's 37 percent. So, the general theme here is that it’s just really a much more complex environment for both leave and absence management, for the employers, the workers, and all the parties involved in the ecosystem. But one thing that we did a double take on as we were looking at it, we're like, boy, this is surprising.
Employers may underestimate the impending challenges around leave and absence management.
And so, when we surveyed employers, we found that 79 percent expect administering their company's overall lead management program will not be very or extremely challenging three to five years from now. Most of them were kind of in the middle. Yeah, we know it's going to be tough, but they really under-appreciate the complexity, right? They don't know.
That was another thing in our survey when we were cleaning the data, where the way some employers were answering their questions like, no, no, no, no, that can't be right. You have a mandate; you’ve got to do this. So, we picked up on that in our research, just a lack of understanding and appreciation. We had a similar question that asked about their ability, their confidence in their ability to comply with the legal and regulatory legislative requirements, and the number was almost as high saying, yeah, we got that.
We're pretty good. Right?
So yeah. But when we talk to the brokers, they're like, oh, boy. Yeah. This is not going to be easy.
Right? Employers, they're really going to struggle. Right? If they’re saying they have a decentralized, like a multistate employer, I'm scratching my head on how I can comply and limit my exposure with the rate of change.
Know, you employers that are doing this on spreadsheets, on post it notes, the small employers, oh my god, how do they do this? And like in the middle, like that one as well, like from a broker's perspective and conversations. You know, how can I possibly be spending fifty to sixty hours a week focusing on healthcare and now I also have to focus on absence and leave management? So, it was interesting, this disconnect.
So, we see that there's a huge education process that's, you know, that's at play here. But the brokers definitely see that as a burning platform.
But, you know, as we look at the different types of leave, one of the things we asked about was around mandated paid PFML. Right? So, a mouthful there. So, employers have a couple of options. They can have a public plan administered by the state, or they can have a private or voluntary plan managed by a carrier or a third party, and that could be fully or self-funded or self-insured, I'm sorry.
And then we asked companies, you know, why would your company choose to offer that private or voluntary plan managed by a company?
There were a lot of different reasons. Think we had an option, they could check off like three of the top ones here, but a less burden on internal staff, it's more cost effective, to achieve better integration, I'm going to come back to that one, To achieve more consistency across state lines. They don't have in-house expertise, but that's some of the things we're hearing: this is going to take a lot of resources. Is that the best use of our resources?
There's a lot of moving parts to this. So, do we have that in-house expertise from compliance, administrative, you know, and other factors that are related to this? How do I create a streamlined, you know, point solution around it?
But this was, you know, interesting, we hear about this a lot, you know, to get that integration with employer sponsored disability, particularly STD and other paid benefits, right? So, they want that kind of unified experience. So, we asked companies, we gave them an option, you know, a little question here that we wanted to get. So, say your company was selecting a carrier for a new disability benefit, which of the following would you choose?
A carrier that provided an integrated program along with the disability for a higher price or a carrier that provided the best value product without an integrated real time absence management system. And so, check it out. What we found is that particularly among midsized and large employers, we found that they are willing to pay more for that integrated experience. And one of the things that we also surfaced here is about because of complexity and the growing number of it, there's a greater desire for outsourcing.
But I think the takeaway here is that in the next few years, more will be outsourced for the most part than those that are not outsourcing these leaves. So, who are they going to be working with? We see a number of different options between the carriers, third party administrators, payroll providers, right? So, again, there's a lot of uncertainty and a lack of knowledge, so they're probably the last person they had a conversation with, right?
And what are their most important capabilities? So, this common theme, managing compliance, HR systems integration, being able to issue payment. Right? So a lot of these things help them streamline and administer the process here.
But the brokers were very hypersensitized and hyper focused around this and on the capabilities. But, you know, like the quote, the employer wants to see that experience, not just for the employer, but also the employee. What's that unified experience just so I can manage it and understand it, right? The less steps and more seamless is a real game changer.
I'm seeing so many more leave and absence cases in the last twelve months than I've seen in the prior nine years of my career. So, this what was once a week signal has really moved to the forefront as a, you know, burning platform that our industry is looking to solve.
That’s a wrap on today’s episode of Insider Insights. As we’ve heard, absence and leave management is no longer a “nice to have” — it’s a critical part of the employee experience and a growing area of investment.
From the rising demand for integrated solutions to the disconnect between employer confidence and broker concern, the message is clear: the next horizon in workforce benefits is here — and it’s complex, personal, and full of potential.
If you found this episode helpful, be sure to follow or subscribe wherever you get your podcasts. And check out LIMRA.com for more insights from the Harnessing Growth study. Thanks for listening.
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