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Benefits Pro reported in October 2024 that about one-third (34%) of employers anticipate shifting their employee benefits cost increase to employees. However, most businesses are considering alternatives that could help them avoid that cost shifting.
 
Businesses are forecasting cost increases of as much as nine percent in 2025 (7.7% according to Benefits Pro). That is up from 2023 and 2024, with increases of 6.5% and 6.9%, respectively.
 
The 2024 Best Practices in Healthcare Survey by wtw (known formally as Willis Towers Watson) found half of employers are looking into programs to help them reduce future benefits costs. Actions under consideration include newer plan designs, tech-enabled solutions, vendor partnerships, pharmacy benefit changes (including alternative drug channels), and others. A fifth will promote account-based health plans or High Deductible Health Plans (HDHPs).
 
Many employers recognize the role their health care and other employee benefits play in helping them attract and retain top talent. Employees frequently cite benefits as second only to pay in their decision about whether to make a job change. What is important to employers is ensuring their benefits programs are competitive with peer organizations.
 
One in five employers surveyed said they are establishing policies to pass on benefit cost increases above a certain level. One-quarter are planning or considering elimination of generous coverage provisions (that are driving costs). Nearly one-fifth (18%) are planning to eliminate health plan options that exceed certain overall cost levels. Few are adjusting eligibility.
 
Whether the current trend will continue is not known for 2025. We will monitor what’s happening and report in future posts.