The majority of US employers plan to maintain their current benefits in 2025, despite rising healthcare costs, says Mercer

NEW YORK, June 27, 2024--(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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Contacts

Media contact:
Ashleigh Jang
Mercer
Ashleigh.Jang@mercer.com
(917) 647-0070