Healthcare cost surge makes parental paid leave benefits a target for workplace cuts

As healthcare costs soar, it's not only individual Americans feeling the financial pain and looking to make trade-offs. Employers are scouring for ways to cut back and generous paid parental leave is among the employee benefits on the chopping block. Zoom Communications announced tweaks to its parental leave policy to bring the benefit more in line with market norms. Zoom employees who give birth now have access to 18 weeks of paid leave, down from 22 to 24 weeks previously, a spokesperson said. Non-birthing parents receive 10 weeks from 16 weeks. Zoom is not alone in scrutinizing some of the more generous employee benefits in the market. More changes can be expected as employers set their 2027 budgets and are seeing red over rising healthcare costs. For some companies, healthcare cost increases will run into the low double-digits, according to Rich Fuerstenberg, senior partner in Mercer's health practice. That's when the CFO enters the picture, looking for areas where benefits can be pared back. "When that happens, everything is on the table," Fuerstenberg said. He's received a few requests from companies to adjust parental leave programs, especially if their offers are more generous than what competitors typically offer. "If I can't show why being above market adds value, then it's going to be considered fat from a show-me-the-numbers perspective," he said. The shift also reflects companies' efforts to align more closely with state-led paid leave programs, which have in