WCI, Inc
July 8, 2024

Plans for 2025 benefits

While the survey data in this article is from employers with over 500 employees, it also provides thought provoking insights for employers of all sizes. And, as a reminder, WCI offers innovative healthcare solutions for large and small employers that often result in substantial cost savings.

A note from WCI

Despite higher health care cost trends, the majority of employers will not cut health benefits in 2025, and many will make enhancements to their programs, although they may be doing so more selectively than in past years, according to recent research from Mercer. The Survey on Health and Benefits Strategies for 2025 noted that employers are focused on three things in 2025: (1) focusing on value to sustain affordability; (2) finding network strategies that work; and (3) offering benefits that matter to employees.

"Employers are juggling faster cost growth with the need to offer attractive benefits and keep health care affordable for all employees," said Ed Lehman, Mercer’s U.S. health and benefits leader. "That’s why it’s important they assess their investments in employee health more carefully than ever to create real, long-term value for employees. To strike a balance between cost containment and ensuring access to high-quality care for their employees, employers are leveraging strategies like high-performance networks and enhanced clinical case management."

According to the survey, in 2025, 36 percent of large employers (those with 500 or more employees) will offer a high-performance, narrow network or other alternative medical plan designed to steer employees to quality, cost-efficient care.

Reproductive benefits. Mercer found continued growth in benefits and resources to support women’s reproductive health needs, from pre-conception planning, which will be offered by 35 percent of large employers in 2025, to benefits designed to help women returning to work after becoming a parent (31 percent). Mercer also investigated coverage for men’s reproductive health for the first time and found that over a third of employers (35 percent) now offer coverage for men’s fertility testing and 20 percent cover sperm freezing, similar to the percentage that cover egg freezing (19 percent).

There has been significant growth in fertility treatment coverage in the past few years. The prevalence of coverage for in vitro fertilization (IVF) doubled between 2019 and 2023, when it reached 45 percent among large employers. The majority of employers providing fertility benefits say they are designed to be inclusive (61 percent), extending coverage beyond women who meet the clinical definition of infertility.

Ensuring access to specialized care during menopause is a new but fast-growing benefit, according to the survey. Next year, 18 percent of employers plan to offer specific resources for women going through menopause, up from just 4 percent in 2023.

Weight-loss medication. The surge in utilization of glucagon-like peptide 1 (GLP-1) drugs for diabetes and obesity treatment had a notable impact on benefit budgets last year, Mercer noted. Currently, only about half of the large employers surveyed (52 percent) cover weight-loss medications. But as more GLP-1 drugs are approved to treat obesity, employers are facing growing pressure to cover them. Plans may experience substantial net new costs given that the drugs cost about $1,000 per month per patient (not counting manufacturers’ rebates, which vary) and a large number of patients may benefit from them.

The survey asked employers about their plans concerning coverage for weight-loss medications. Despite the cost, very few large employers have either dropped coverage or plan to drop it (3 percent), and only 10 percent say they are considering it. On the other hand, 27 percent of employers are considering adding coverage.

Climate-related health impacts. Nearly two-thirds of large employer respondents said their workers have been affected by some type of climate event or natural disaster in the past two years — with over a third stating their business operations have been affected. Mercer found that around half of respondents (53 percent) have at least some policies or programs in place in preparation for climate events or have plans to implement them in 2025. These include policies and resources to help employees in the aftermath of a disaster and guidelines to ensure worker safety and health during extreme weather conditions.

"Employers are starting to think about the impact climate events can have on their people and their businesses," said Tracy Watts, Mercer’s national leader for U.S. health policy. "Employers could do more to plan for climate events and safeguard employee health. Conducting a vulnerability assessment to understand which employees are most at risk is a good place to start."

SOURCE: https://www.mercer.com/en-us/insights/total-rewards/employee-benefits-strategy/health-and-benefit-strategies-report/

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