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Mercer Report Projects 5.8% Health Benefits Cost Increase in 2025
U.S. employers estimate health benefit costs will increase by 5.8% in 2025, according to Mercer’s 2024 National Survey of Employer-sponsored Health Plans. This would mark the third consecutive year that the total cost per employee rose more than 5%. The report attributed the higher costs to the widening gap between the supply of healthcare workers and the demand for healthcare services, along with costly behavioral healthcare and weight loss medications.
Furthermore, employers estimated that their costs would rise by an average of 7% if they took no action to lower costs. Half (53%) of employers said they would make cost-cutting changes (e.g., raising deductibles) to their plans next year to manage rising costs, compared to 44% in 2024. Not surprisingly, smaller employers (organizations with 50-499 employees) estimate being impacted the most, reporting that costs would rise by an average of 9% if they took no action to lower costs. In general, most industry reports project an increase in the 7%-9% range.
While the best strategies for reigning in these costs may vary by organization, employers should nevertheless review their benefits offerings to determine the most effective cost-saving strategies and whether they are meeting employees’ needs. Contact us for more healthcare resources.
Motivating Employees to Spend More Time With Open Enrollment
A Voya Financial survey revealed that the average American spends far more time on social media each day than reviewing their benefits information for just one day during open enrollment. In fact, nearly 7 in 10 employees spend 30 minutes or fewer reviewing their options. The vast majority of employees simply choose the same options as the previous year during open enrollment. To help encourage employees to actively participate in the open enrollment process, employers may consider the following strategies:
- Educate and inform employees by hosting interactive workshops and webinars or developing easy-to-understand guides, frequently asked questions and comparison charts.
- Leverage technology to simplify the open enrollment process and make it more engaging.
- Provide robust support and assistance, such as offering a benefits help desk or hotline.
- Communicate about benefits year-round, highlighting the direct financial impact benefits decisions can have.
- Solicit employee feedback about the enrollment process and use it to make improvements.
- Recognize and reward employees who actively participate in open enrollment and benefits-related activities.
Motivating employees to spend more time with open enrollment is not just about ensuring they make the right choices; it also fosters a culture of informed decision-making and engagement. Reach out for additional open enrollment guidance or information.
Reach out to us for more employee benefits resources.
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