The 2024 Best Practices in Healthcare Survey by WTW found that increasing health care costs are driving employers to focus on redesigning health care plans to improve affordability.

According to the survey, more than half (51%) of U.S. employers expect to redesign health care plans to lower costs. They will likely focus on adopting new plan designs and implementing network strategies that direct employees toward more affordable, high-quality providers and care facilities.

The report said U.S. health care costs have reached record highs since the COVID-19 pandemic, with nearly half of employers expecting costs to exceed budget projections this year.

A projected increase of 7.7% aligns with other market forecasts, which range from 5%-9%. Recently, a report from the International Foundation of Employee Benefit Plans predicted a median 8% hike in health care costs in 2025, largely due to rising pharmacy costs and catastrophic health claims. The Business Group on Health also released a report with similar estimates.

Cost Mitigation Strategies

Aside from plan redesign, 52% of employers plan to introduce programs aimed at cutting expenses.

Strategies mentioned by the report to lower costs include alternative drug channels and pricing, such as promoting drug discount cards and allowing members to buy medications from retail or “cost plus” outlets. Other cost-cutting measures employers are planning to implement over the next two years include:

  • Putting vendors and health plans up for bid
  • Evaluating employee assistance and mental health programs
  • Exploring technology-enabled solutions to manage expenses
  • Carving out pharmacy benefits

Meanwhile, about a third (34%) of employers plan to transfer costs to workers through premium contributions, and 20% intend to promote account-based of high deductible health plans.

Takeaway

With health care costs continuing to rise, employers are likely to pursue proactive strategies. Plan designs will vary by employer, but the right strategies may help offset the rising prices projected in 2025.

Connect with an employee benefits specialist to talk about how a well rounded benefits plan can help support your business.

The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and notbe relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2024 Zywave, Inc. All rights reserved.

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68 National Drive
Glastonbury, CT 06033
860-652-3235
1110 Boston Post Rd
Guilford, CT 06437
203-458-4000
501 Main St, Monroe, CT 06468
Surety | Suite 2D | 203-445-8388
Business & Personal Insurance | Suite 101 | 203-268-9999
377 Main Street
Unit 103
Niantic, CT 06357
860-652-3235
127 Norwich Rd
Plainfield, CT 06374
860-564-3315
363 So Center Street
Windsor Locks, CT 06096
860-652-3235
229 Main Street
Milford, MA 01757
508-473-4045
182 Main Street, Suite 202
Northampton, MA 01060
844-923-7873
300 Main Street
Oxford, MA 01540
508-987-0333
195 Lake Ave,
Worcester, MA 01604
508-969-1786
70 Tanner Street
Haddonfield, NJ 08033
800-220-3434

 

6 McMaster Street, Suite 2
Owego, NY 13827
607-687-3444
14 Columbia Circle, Suite 204
Albany, NY 12203
518-477-5150
300 Plaza Drive
Vestal, NY 13850
607-754-1411
418 Waverly Street
Waverly, NY 14892
607-565-2872