Personalized Employee Benefits: What They Are and Why You Should Offer Them

Ask 10 employees what they want from their benefits package, and you’ll get ten different answers. One’s paying off student loans. Another’s starting IVF. Someone else just wants a therapist who takes their insurance. That’s why companies are moving away from cookie-cutter plans and investing in personalized employee benefits instead. And it’s paying off—since 2017, the number of employees who say their benefits meet their needs has jumped by up to 45%. 

In this guide, we’ll break down what personalized benefits are, why they matter, the types of benefits leading the shift, and how to implement them.

What are personalized employee benefits?

Personalized employee benefits give individuals the freedom to choose perks that align with their lives and priorities. Instead of offering a uniform set of benefits, employers provide flexible options or spending allowances that employees can use in ways that matter to them. 

A recent grad might put their benefits toward mental health support or career development. Someone further along in their career may focus on financial security or support for family responsibilities. 

This approach understands that no two employees have the same needs and gives everyone access to meaningful support.

6 types of personalized employee benefits

Customized benefits take many forms, depending on the benefits your employee values most. Here are some of the most effective types of benefits employers use to meet a wide range of needs.

Personalized health benefits

Health benefits are foundational, but most traditional plans fall short when employees are managing vastly different health goals and challenges. Personalized healthcare benefits create space for flexibility, giving employees access to resources that are relevant to their lives, whether that’s mental health support, stress management, smoking cessation, or nutrition counseling. These offerings help employers support a wide spectrum of needs without relying on generic coverage that rarely works well for everyone.

Here’s how employers are structuring and funding these more adaptable health offerings.

Health reimbursement arrangements (HRA) 

Health Reimbursement Arrangements (HRAs) are employer-funded accounts that reimburse employees for eligible medical expenses, including premiums. Introduced in 2002, HRAs offer a tax-advantaged way to provide healthcare flexibility without the rising costs of traditional group plans. Employers control the budget, and employees choose how to spend it.

Common types of HRAs include:

• Integrated HRA: Paired with a group health plan to reimburse additional out-of-pocket costs
• Qualified small employer HRA (QSEHRA): Designed for companies with fewer than 50 employees
• Individual Coverage HRA (ICHRA): Allows employees to purchase individual plans on the open market
• Excepted Benefit HRA (EBHRA): Covers limited expenses not included in primary health coverage

Health savings accounts 

Health savings accounts (HSAs) are tax-advantaged savings accounts available to individuals enrolled in high-deductible health plans (HDHPs). HSAs allow both employees and employers to contribute pre-tax dollars to cover qualified medical expenses. 

Funds in an HSA roll over annually and remain with the employee, even if they change jobs. Employees can use these accounts to pay for expenses like copayments, prescriptions, dental care, and vision services.

Health stipends 

Health stipends are taxable allowances employers provide to cover healthcare-related expenses. Unlike HRAs or HSAs, they’re not tied to a specific health plan or account. Employees can use the funds for a wide range of needs, from therapy sessions to gym memberships, based on what makes the most impact.

Health stipends are especially useful for covering part-time employees, international staff, and 1099 contractors who typically don’t qualify for traditional benefits. Because stipends are considered taxable income, employers don’t need to manage regulatory requirements, but they also don’t receive the same tax advantages as other health benefit vehicles.

Personalized wellness benefits 

Personalized wellness benefits give employees a choice in how they care for physical and mental health. Whether offered directly or through a lifestyle spending account (LSA), these benefits are designed to adapt to individual needs instead of assuming a one-size-fits-all solution.

Employees might use wellness benefits to pay for:

• Gym memberships or fitness class passes
• Meditation or mindfulness apps
• Nutrition or sleep coaching
• Alternative therapies

LSAs make this even more flexible by removing the restrictions tied to pre-tax benefits.

Personalized work-life balance benefits 

Personalized work-life balance benefits recognize that people have different pressures outside of work and that no two employees define “balance” the same way. Some may need flexibility to manage school drop-offs. Others might be caring for aging parents, navigating a new baby, or carving out time for personal growth. 

Benefits in this category can include:

• Flexible schedules that support nontraditional routines
• Paid leave for volunteering or skill-building
• Help with childcare or eldercare
• Parental leave that actually supports new parents
• Confidential support through employee assistance programs

Done well, these benefits are integral to enhancing employee satisfaction, making it easier for every individual to bring their full selves to work.

Personalized financial benefits 

Personalized financial benefits meet employees where they are, whether paying down student debt, building savings, or looking for guidance on long-term goals. Financial stress impacts focus and performance, and personalized support helps ease that burden.

Offerings might include:

• Contributions toward student loan repayment
• On-demand access to financial advisors
• Retirement and investment planning
• Employee discount programs
• Stipends for professional development or certifications

These benefits show up as practical, tangible support, and can make a real difference in an employee’s financial well-being.

Why provide personalized benefits to your employees?

There’s no such thing as a standard employee, so why do so many companies fall into the trap of offering standard benefits? Here’s how personalized benefits are a superior alternative.  

They support a diverse workforce 

Personalized benefits are a practical extension of a company’s DEI commitments, especially when paired with equitable access and choice. According to WTW’s Global Benefits Attitude Survey, nearly half of employees say their employer is making visible progress on inclusion, from diverse leadership to fair promotion practices. Benefits that adapt to individual circumstances reinforce that progress in a tangible way.

They increase employee retention and engagement 

Thoughtfully designed benefits signal that the company is paying attention to what matters in people’s lives, which builds trust and loyalty over time. When employees feel understood and supported, they’re more likely to stay and more likely to care about the work they do. 

That’s especially important this year, with 88% of organizations citing retention as a top concern. Competitive salaries may bring people in the door, but benefits that feel personal are often what convince them to stay.

They enable easier cost management of your benefits 

Rising benefits costs continue to put pressure on budgets. As of December 2024, employers in the private industry were spending an average of $13.20 per hour on benefits, which is nearly 30% of total compensation, according to the U.S. Bureau of Labor Statistics.

Personalized benefits help control those costs. When employees are given choices, it becomes easier to see which offerings actually get used and which don’t, cutting waste without cutting support. Programs that focus on wellness and preventative care also reduce the likelihood of more expensive interventions down the line. The result is a more efficient use of every dollar spent.

What does the future of personalized employee benefits look like?

Since the COVID-19 pandemic, employees have expected more flexibility and relevance in their benefits, and many employers have responded. Here’s how companies have had to rethink how they deliver support in a way that makes sense for both employees and the business.

The group health insurance market continues to shrink

Group plans are becoming harder to sustain, especially for smaller employers. From 1999 to 2023, the average annual premium for employer-sponsored coverage jumped from $2,196 to $8,435 per person, according to KFF. With costs rising, many companies are moving toward health benefits that offer greater flexibility and better budget control.

Labor market uncertainty is influencing benefit strategies

Unemployment rates have fluctuated year over year since 2020 along with record numbers of resignations that have made workforce planning difficult. Offering flexible, tailored support helps employers respond quickly to changing expectations and hold onto top performers, even when the broader job market is unpredictable.

Employees want more control over their healthcare decisions

Many people no longer expect their employer to pick a single health plan on their behalf. They want to compare options, find the right coverage for their needs, and access care on their own terms. Personalized benefits make that possible by supporting everything from individual insurance plans to mental health tools and preventative care.

How to implement personalized employee benefits with Benepass

Personalized benefits only succeed when employees know how to use them, and feel confident that the options reflect their needs. That requires an intentional rollout, clear education, and ongoing support. Here’s how to do it well:

• Communicate early and often. Don’t wait for open enrollment to introduce new benefits. Start with a clear announcement, then follow up with regular touchpoints across channels such as email, Slack, onboarding documents, and manager training.
• Build easy access to information. Offer a centralized resource hub with FAQs, brochures, and one-pagers. Make it simple for employees to compare options, understand their choices, and take action.
• Create opportunities for human connection. Not every question can be answered in a PDF. Give employees the option to speak with a benefits rep or attend live sessions where they gain clarity in real time.
• Use feedback to guide what comes next. Track usage, ask for input, and revisit what’s working. Personalized benefits are designed to evolve, so your rollout process should reflect that flexibility.

The good news? With the right infrastructure, scaling this kind of thoughtful, flexible benefits experience isn’t difficult. Benepass helps employers deliver high-impact, personalized benefits programs through a platform that’s easy to use and built for change. A lifestyle spending account is a great place to start, offering choice, control, and immediate value to your team.

Ready to create benefits your employees will actually enjoy? Book a free Benepass platform demo today or contact sales@getbenepass.com to connect with a benefits specialist.