The majority of US employers plan to maintain their current benefits in 2025, despite rising healthcare costs, says Mercer
June 27 2024 - 9:45AM
Business Wire
Mercer, a business of Marsh McLennan (NYSE: MMC) and a global
leader in redefining the world of work, reshaping retirement and
investment outcomes and unlocking real health and well-being, today
released the results of its Survey on Health and Benefit Strategies
for 2025. The survey reveals that despite higher healthcare cost
trends, the majority of employers will not cut health benefits, and
many will make enhancements to their programs, although they may be
doing so more selectively than in past years.
“Employers are juggling faster cost growth with the need to
offer attractive benefits and keep healthcare affordable for all
employees,” said Ed Lehman, Mercer’s US 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,” said Mr. Lehman. According to the
survey, in 2025, more than a third of large employers (36% of 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.
Focus on inclusive reproductive benefits
The survey highlights the continued growth in benefits and
resources to support women’s reproductive health needs, from
pre-conception planning, which will be offered by 35% of large
employers in 2025, to benefits designed to help women returning to
work after becoming a parent (31%).
There has been significant growth in fertility treatment
coverage in the past few years. As Mercer previously reported, the
prevalence of coverage for in vitro fertilization (IVF) doubled
between 2019 and 2023, when it reached 45% among large employers.
The majority of employers providing fertility benefits say they are
designed to be inclusive (61%), 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. Next year, 18% of employers plan to offer
specific resources for women going through menopause, up from just
4% in 2023.
This year, the survey explored coverage for men’s reproductive
health for the first time and found that over a third of employers
(35%) now offer coverage for men’s fertility testing and 20% cover
sperm freezing, similar to the percentage that cover egg freezing
(19%).
Coverage for weight-loss medication likely to expand
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.
Currently, only about half of the large employers surveyed (52%)
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%), and
only 10% say they are considering it. On the other hand, 27% of
employers are considering adding coverage.
Moving up the benefits agenda: 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. While events like floods
and wildfires have an obvious impact on employee health and safety,
climate-related conditions such as extreme heat and poor air
quality can lead to heat stress, heat stroke, chronic disease
complications and mental health issues.
The good news is that around half of respondents (53%) 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 US 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.”
Click here to learn more and download the report.
About Health & Benefit Strategies for
2025
This study includes 697 organizations (537 organizations with
500 or more employees and 160 organizations with fewer than 500
employees). The study was fielded between March 21 and April 12,
2024.
About Mercer
Mercer believes in building brighter futures by redefining the
world of work, reshaping retirement and investment outcomes and
unlocking real health and well-being. Mercer’s more than 20,000
colleagues are based in 43 countries and the firm operates in over
130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC),
the world’s leading professional services firm in the areas of
risk, strategy and people, with more than 85,000 colleagues and
annual revenue of $23 billion. Through its market-leading
businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh
McLennan helps clients navigate an increasingly dynamic and complex
environment. For more information, visit mercer.com. Follow Mercer
on LinkedIn and X.
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version on businesswire.com: https://www.businesswire.com/news/home/20240627206952/en/
Media contact: Ashleigh Jang Mercer
Ashleigh.Jang@mercer.com (917) 647-0070
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