What will be the top benefits headline of 2025? It will be a year of change, experts predict, with trends that will be sharply influenced by external factors and that will have clear impacts on HR and benefits leaders.
In some respects, experts say, the benefits landscape will see the acceleration of ongoing trends—for instance, increasing healthcare costs and demand for personalized benefits like financial support—as well as new influences, such as innovative uses for AI in benefits data analysis.
Paul Fronstin, director of health benefits research at the Employee Benefit Research Institute, recently sat down with HR Executive to discuss the most important benefits trends in 2025.
Data integration
Data on health and wellness programs has traditionally sat in silos, preventing employers from combining the information to see how one program could be impacting another, Fronstin says.
But in 2025, more employers are expected to leverage technology that will better integrate their health and wellness data. For instance, he says, some may utilize AI tokenization, which can help leaders compare data and identify causal relationships. Employers are also more likely to keep all of their data in the same data warehouse, which will impact data analysis, he says.
Such process improvements can enable leaders, for instance, to explore whether their financial wellness programs are meaningfully reducing employee stress—by pulling together data on biometrics, mental health claims and financial wellness benefit utilization, Fronstin says.
“You have the data, and you’ve got to have the analytics. Once employers have that information, they could go back and start tailoring their benefits,” he says.
ICHRAs
Individual coverage health reimbursement arrangements (ICHRAs) gained steam during the previous Trump administration, and with his re-election, there may be a push to have more employers adopt ICHRAs, Fronstin says.
Under an ICHRA, an employer gives employees a set amount of money on a pre-tax basis, which they can use to shop for a healthcare plan on the insurance marketplace. It’s an approach that experts say can make healthcare costs more predictable for employees and potentially require less administrative work on the part of HR and benefits professionals. Still, HR and benefits oversight is critical to dispel employee confusion over plan selection, says Fronstin.
Rising healthcare costs
Employers expect to face a whopping 7.8% increase in healthcare spending in 2025—the largest year-over-year projected increase in more than a decade, according to a Business Group on Health report. That jump is significantly higher than the roughly 6% annual increase forecast since 2010.
“The cost trend pressures are higher than they have been in over a decade, driven by costly and chronic conditions as well as prescription drug costs,” says Ellen Kelsay, president and CEO of Business Group on Health.
Cancer ranks as the most expensive condition to treat, according to the Business Group on Health report, ahead of musculoskeletal conditions, such as arthritis and back pain, and cardiovascular conditions, such as arrhythmia.
“However, there are opportunities for employers and other industry stakeholders to address these challenges by pursuing near-term tactics as well as long-term strategies,” Kelsay says.
Pharmacy changes
Heading into 2025, pharmacy-related costs consume more than 25% of employers’ U.S. healthcare budgets, Kelsay says. This is driven by costly specialty medications, cell and gene therapies, and the use of GLP-1s for a growing number of indications, she adds.
“This trend is expected to increase in the years ahead,” Kelsay says. Because of concerns about costs and a lack of transparency about pricing, she adds, “employers will revisit and assess their current pharmacy partners.”
Growing vendor accountability
One-third of employers in the Business Group on Health report they will conduct requests for proposals from their pharmacy benefit manager (PBM) in 2025. The goal is to potentially get improved pricing from their incumbent partner or open the door for new partners promising competitive and more transparent financial terms, Kelsay says.
The landscape of solutions is expanding to include a newer generation of vendors that provide increased visibility into contract terms, guarantees and rebates, and newer models offered by existing partners, she adds.
“Employers will increasingly look to hold their vendor partners accountable for delivering higher-quality care that shows evidence of improved outcomes, experience and, ultimately, costs,” says Kelsay.
Growing need for financial health support
Demand for financial wellness programs, which have gained employer interest over the past five to seven years, grew sharply post-pandemic as inflation soared to a 40-year-high in 2022. Employers will continue to lean toward this benefit in 2025, Fronstin says.
“The rising cost of everyday living expenses and student loans have helped increase financial stress for a growing percentage of the population,” Fronstin says. “Retirement planning services and emergency savings are some of the things employers are now doing and will be focusing on for next year.”
Related: Read more about how to prepare for 2025.
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