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EXECUTIVE SUMMARY

Highlights the top trends in employer-sponsored healthcare, including increasing
health care costs, continued efforts on supporting employees’ complex needs and
a new focus on vendor partnerships.



 * 
 * 
 * 
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August 20, 2024

2025 Employer Health Care Strategy Survey
The annual hallmark survey predicts the upcoming year's landscape of
employer-sponsored health care.
Full Series


The role of a HR/Benefits leader has never been more complex and demanding. The
2025 survey results highlight the challenges employers face. Based on the
findings of this survey, the following emerged as top focus areas among
employers.


 * 1 | HEALTH CARE COSTS ARE EXPECTED TO GROW AT THE HIGHEST RATE IN A DECADE.
   
   Since 2022, the projected increase in health care trend, before plan design
   changes, rose from 6% in 2022 to almost 8% for 2025. Even after plan design
   changes, actual health care costs continued to grow at a rate exceeding
   pre-pandemic increases. These increases point toward a more than 50% increase
   in health care cost since 2017. Moreover, this health care inflation is
   expected to persist and, in light of the already high burden of medical costs
   on the plan and employees, employers are preparing to absorb much of the
   increase as they have done in recent years.
   Figure 1: Median Increase in Health Care Trend (Actual and Projected),
   2017-2025
   Figure 2: Employer and Employee Contributions to Health Care Costs, 2024


 * 2 | PHARMACY COSTS ARE LARGELY RESPONSIBLE FOR OVERALL INCREASES AND CONSUME
   A GROWING SHARE OF THE HEALTH CARE BUDGET.
   
   Between 2021 and 2023, the median percentage of health care dollars spent on
   pharmacy has jumped from 21% to 27%, suggesting that nearly all of the health
   care cost increase noted above is related to pharmacy cost. Therefore, it is
   not surprising that 76% of employers are “very concerned” about overall
   pharmacy cost. Furthermore, 58% are very concerned about the opaqueness of
   the pharmacy supply chain and 56% are very concerned about the lack of
   transparency in pharmacy contracting and rebates. Finally, only 1% of
   employers think that the prescription drug market is competitive enough to
   keep prescription drugs affordable, a further decline from 5% who thought so
   in 2023. The majority of employers call for a combination of market and
   government reform to curb drug prices.
   Figure 3: Pharmacy Benefit Concerns, 2024
   Figure 4: Percentage of Health Care Spend on Pharmacy Overall (Median),
   2021-2023
   Figure 5: Perspectives on Whether the Prescription Drug Market Is
   Competitive, 2023-2024


 * 3 | EMPLOYERS ARE SEEING COST PRESSURES FROM GLP-1 MEDICATIONS, WHICH ARE
   CONSIDERED A TOP DRIVER OF HEALTH CARE COSTS THIS YEAR.
   
   Seventy-nine percent of employers have seen an increase in interest in
   obesity medications – including GLP-1s – among their covered members. This
   may be driven by more employees deemed eligible for coverage for these
   medications: While they have been a standard for treatment for diabetes
   (covered by 96% of employers), coverage is expanding to other conditions,
   namely obesity (67% in 2024) and cardiac conditions (34%). With demand rising
   and more patients being eligible, it is no surprise that 96% of employers
   worry about the long-term cost implications of these drugs. Although GLP-1
   medications are showing near-term promise for the treatment of obesity and
   other conditions, their cost is concerning. When asked which strategies
   employers would deploy to reduce overall health care costs, 52% would either
   immediately implement or strongly consider reducing coverage for GLP-1s
   (Figure 7).
   Figure 6: Coverage of GLP-1s, 2024-2027


 * 4 | MANAGING AND REASSESSING VENDOR PARTNERSHIPS ARE AT THE CENTER OF
   EMPLOYERS’ PLANS TO ADDRESS COSTS AND IMPROVE PERFORMANCE. EMPLOYERS ARE
   REASSESSING THE QUALITY AND EFFECTIVENESS OF THEIR PARTNERSHIPS AND LOOKING
   TO INTEGRATE THEIR BENEFITS TO REDUCE COSTS AND SIMPLIFY THE MEMBER
   EXPERIENCE.
   
   Figure 7 shows the major levers employers would pull, if necessary, to keep
   health care costs flat. Employers would redouble efforts focused on vendor
   performance, leveraging the RFP process to get better pricing from vendors
   and ending arrangements with underperforming partners. Employers also see
   non-traditional health plans and transparent PBM programs as additional in
   their cost-cutting strategies, along with tighter management of cost drivers
   such as GLP-1s and eliminating ineffective programs.
   Figure 7: Strategies Employers Would Consider for Reducing Costs, 2024


 * 5 | CANCER REMAINS THE TOP CONDITION DRIVING COST; HOWEVER, MORE EMPLOYERS
   SAY THAT CARDIOVASCULAR CONDITIONS ARE AMONG THEIR TOP THREE COST DRIVERS.
   
   Concerns about the cost of cancer care may be further fueled by increased
   prevalence in younger populations. Furthermore, the growing cost of cancer
   treatments, including gene and cell therapies currently in the pipeline,
   leaves employers questioning how their plans will be impacted. While it is
   imperative that employers adopt strategies to address treatment cost, it is
   equally important that they amplify efforts to increase cancer prevention and
   early detection via screening approaches. Beyond cancer, employers continue
   to note musculoskeletal conditions as a cost concern. In addition, 40% of
   employers put cardiovascular conditions as their #3 cost driver, up from 30%
   in 2023.
   Figure 8: Conditions Driving Cost, 2022-2024


 * 6 | PROTECTING ERISA PREEMPTION IS EMPLOYERS’ HIGHEST PRIORITY FOR THE
   ADMINISTRATION AND CONGRESS.
   
   This finding reflects the importance of ERISA to employers, which allows them
   to offer their employees comprehensive benefits in a nationally consistent
   and competitive manner. Employers also prioritize addressing mental health
   and health care workforce shortages and increasing generic medication
   availability. Table 1 depicts the policy priorities based on average ranking
   of the employer respondents.
   Table 1: Prioritized Efforts for the Administration and Congress, 2024


 * 7 | MENTAL HEALTH CONTINUES TO BE A PRIORITY FOR EMPLOYERS, WITH A FOCUS ON
   ACCESS AND WAYS TO ELIMINATE COST BARRIERS.
   
   Seventy-nine percent of employers say that access is one of their top three
   mental health priorities for 2025. To address access and costs, employers
   continue to pursue strategies, such as virtual counseling, eliminating
   out-of-network barriers and using on-site counselors.
   Figure 9: Mental Health Priorities, 2024-2025
   Figure 10: Approaches to Improve Mental Health Access, 2023-2025


 * 8 | EMPLOYERS REMAIN COMMITTED TO HEALTH EQUITY EFFORTS THAT ADDRESS
   DISPARITIES.
   
   Employers continue to pursue a number of targeted approaches to narrow health
   disparities within their plans and programs. Holistically, the most common
   tactic found in the survey is collaborating with employee resource groups
   (ERGs) to promote benefits and well-being initiatives to specific groups.
   Employers are also drilling down on equity in four key areas: affordability
   issues for lower income employees; supporting LGBTQ+ employees’ health needs;
   women’s and reproductive health; and supporting those with a disability or
   who are neurodiverse.
   Figure 11: Addressing Health Inequities Within Health and Well-being
   Programs, 2024-2027


CITATIONS

Before referring to or using this survey report in any way, you must receive
permission from Business Group on Health. Please contact
cddi@businessgrouphealth.org.

Suggested citation for this survey report:

Business Group on Health. 2025 Employer Health Care Strategy Survey. August
2024. Available at:
https://www.businessgrouphealth.org/resources/2025-Employer-Health-Care-Strategy-Survey-Intro.

2025 Employer Health Care Strategy Survey
 * Intro
   2025 Employer Health Care Strategy Survey
   
 * Executive Summary
   Executive Summary
   
 * Part 1
   Perspectives on Health Care
   
 * Part 2
   Health Care Costs
   
 * Part 3
   Vendors and Partnerships
   
 * Part 4
   Health Care and Mental Health Design
   
 * Part 5
   Pharmacy Costs and Management
   
 * Part 6
   Health Care Delivery
   
 * Part 7
   Health Equity
   
 * Part 8
   In Conclusion: 2025 Priorities
   
 * Full Report
   Full Report
   
 * Chart Pack
   Chart Pack
   




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