For years, offering a good benefits package meant checking off a few standard boxes: a decent health plan, maybe a retirement option, and the occasional pizza party or casual Friday. But those days are long gone. Today’s workforce—especially younger generations—isn’t just looking for perks. They’re looking for priorities.
And for employers, that shift matters. Because if you’re still thinking about benefits as a side dish to the “main course” of salary, you might be missing out on top talent.
So what changed?
A lot, actually. From the rise of remote work to student loan debt, inflation, mental health awareness, and even global pandemics, the expectations around employer-provided benefits have evolved dramatically in just the past decade. Today, benefits aren’t just something employees hope for—they’re something they shop for.
Let’s take a closer look at how generational preferences are redefining what a great benefits package looks like—and why flexibility and customization are now non-negotiable.
Generational Shifts: From Stability to Flexibility
In the past, a stable paycheck and traditional insurance were enough to attract and keep employees. But as younger generations have entered the workforce, those baseline expectations have shifted.
Baby Boomers typically valued long-term stability: pensions, comprehensive employer-sponsored insurance, and retirement plans with matching. For many of them, sticking with one company for 20+ years was the norm.
Gen X, often sandwiched between aging parents and growing children, placed a strong emphasis on healthcare and work-life balance—but still generally operated within the traditional job framework.
Millennials, now the largest segment of the workforce, came of age during economic uncertainty and rising healthcare costs. They’re used to shopping for the best options, questioning the status quo, and wanting benefits that reflect their lifestyles and values. Gen Z has only doubled down on these trends—bringing with them a stronger focus on mental health, flexibility, and personal agency over employer control.
In short: the younger the worker, the less patience they have for rigid, outdated systems. They want benefits that meet them where they are.
Flexibility and Choice Are the New Gold Standard
One of the clearest takeaways from this generational shift is the demand for flexible, customizable benefits. Cookie-cutter health plans or generic packages don’t cut it anymore. Today’s employees want to feel like they’re getting something built for them, not just inherited from a benefits handbook written in 1998.
That’s where tools like Flexible Spending Accounts (FSAs) and Individual Coverage Health Reimbursement Arrangements (ICHRAs) come into play.
FSAs: Empowering Smart Spending
An FSA such as Benepass’s solution lets employees set aside pre-tax money for out-of-pocket health expenses. It’s a smart way to save money on things they already need to pay for—like co-pays, prescriptions, and even glasses or dental care.
What makes FSAs especially attractive to younger workers is the sense of control they offer. Instead of being forced into a one-size-fits-all health plan, employees can use their FSA funds to cover costs that matter most to them. It’s a simple way to customize a portion of your benefits, while also getting a financial advantage through tax savings.
Employers love FSAs too—because they offer value without high administrative costs or complicated plan changes.
ICHRAs: A Game-Changer for Health Coverage
If FSAs are about spending flexibility, ICHRAs are about complete freedom of choice.
An Individual Coverage Health Reimbursement Arrangement (ICHRA) allows employers to reimburse employees—tax-free—for the cost of buying their own health insurance. Instead of the employer picking one group plan that fits no one perfectly, each employee chooses their own coverage based on their location, needs, and preferences.
For remote teams and companies with workers in multiple states, ICHRAs make a lot of sense. No more headaches about regional provider networks or finding a plan that works for both your Austin and Chicago offices. Each employee picks the best option for their situation, and the employer supports them with a fixed, predictable reimbursement amount.
Younger employees especially love ICHRAs because they:
- Allow for independence and autonomy
- Enable more personalized healthcare decisions
- Align with the gig/freelance economy mindset, even in full-time roles
Plus, employers benefit too—by setting clear budgets, reducing admin overhead, and avoiding unpredictable premium hikes.
Beyond Healthcare: What Else Matters?
While FSAs and ICHRAs are leading the flexibility charge, benefits expectations don’t stop at healthcare. Younger workers are increasingly asking for support in other areas of life, too:
- Mental health resources (teletherapy, counseling stipends, mental health days)
- Financial wellness programs (student loan repayment, savings tools, emergency funds)
- Lifestyle benefits (gym memberships, pet insurance, learning stipends)
- Remote work flexibility (home office setup support, commuter benefits for hybrid workers)
And here’s the thing: they’re not expecting all of these benefits to come standard. But they are looking for options. The ability to choose a package that feels aligned with their lives—not just their jobs—makes a huge difference in how they view an employer.
Customization as a Retention Strategy
Offering flexible benefits isn’t just about recruitment—it’s a retention strategy. When employees feel that their employer supports their whole selves, not just their job titles, they’re more likely to stay loyal, be engaged, and recommend their workplace to others.
And in today’s tight labor market, that loyalty is priceless.
Companies that give employees a say in how they’re compensated—through tax-smart tools like FSAs and ICHRAs—show that they trust their team to make decisions that are best for them. That’s not just good HR policy. That’s good leadership.
Final Thoughts: Meeting Expectations Without Blowing the Budget
Modern benefits strategy doesn’t mean throwing more money at the problem. It means being smart with what you offer and how you offer it. FSAs and ICHRAs are great examples of high-impact, low-complexity benefits that put power back in employees’ hands while offering employers predictable, scalable solutions.
If you want to meet the expectations of today’s workforce—and build a benefits package that feels like a priority, not just a perk—it’s time to shift from static plans to dynamic options.
Because the best benefits strategy isn’t about offering everything. It’s about offering the right things—in the right way—for the people who make your business possible.