13 February 2025 Group Benefits, Insurance Discounts benefits, or raising deductibles and other cost-sharing, and result in higher out-ofpocket costs for plan members seeking care. Employer shopping for alternative health coverage and options is a common strategy to identify better options for the company situation. Because healthcare cost is typically shared between employer and employee, managing cost is important to minimize employee cost. On average, the survey found that employees would pay 21% of health insurance premiums in 2025, the same as 2024. Employers are concerned about their healthcare affordability, and affordability to their employees. Employer provision of worker health benefits is a critical workforce retention asset. But employers also need to manage the company’s fiscal impact of escalating healthcare costs. Balancing these competing priorities will be a huge employer challenge in the next few years. Here are some ways to improve healthcare affordability, when searching for and developing a health program that best fits your company situation, your employee team, and their families: • Employer annually shops and compares alternative health coverage and quote options that best fit your team. Third Year of High Health Cost Growth in 2025 ›By Rex Storm, Executive VP The mercer.com annual ‘National Survey of Employer-Sponsored Health Plans’, reported that total health benefit cost per employee is expected to rise 5.8% on average in 2025. Smaller employers (under 499 employees) across America have been hit the hardest—they reported that cost would rise by about 9% on average, if an employer took no action to lower it. 2025 is the third consecutive year of health benefit annual cost increases exceeding 5% per year, following a decade of annual cost increases averaging only 3%. Complex Forces Driving Higher Cost Trends 1. Insurers and health providers annually change their rates and provisions—as they are under tremendous changing fiscal, regulatory, and marketplace pressures. 2. Spending on prescription drugs remains the fastest-growing component of health benefit cost. 3. Widening gap between short supply of healthcare workers and healthcare capacity is not pacing rising health service demand, which is building as older Americans become a larger population share. 4. Inflation fuels elevated cost and price growth. 5. Under-insured and uninsured healthcare patient demands strain providers that are required to deliver healthcare. 6. Lagging government reimbursement for government-required healthcare to more patients. 7. 2021 healthcare price transparency requirements have unintended consequence of raising provider reimbursement. 8. Rising availability of costly technologies and treatments that prolong life. 9. Increased utilization in behavioral healthcare and medications for diabetes/obesity. Take a Look at AOL’s ‘Association Health Plan’ New health coverage is available—only to AOL members—from Health Net Insurance at very competitive rates. AOL’s ‘Association Health Plan’ offers savings options on health insurance for employees, families, and owners. Healthcare coverage is the single most important benefit you can offer loyal employees. Ask an AOL partner agent to help you offer health benefits within your budget. To request a quote, contact: [email protected] or 503.364.1330. Employer Response to Faster Cost Growth The mercer.com survey results suggest that about half of employers (53%) will make cost-cutting changes to their plans in 2025. These changes may involve reducing Continued →
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