Key Trends in U.S. Benefits for 2025 and Beyond

Key Trends in U.S. Benefits for 2025 and Beyond
December 12, 2024 7 mins

Key Trends in U.S. Benefits for 2025 and Beyond

Key Trends in U.S. Benefits for 2025 and Beyond

As healthcare costs continue to rise, employers are trying to balance the need to take care of their workers with the need to keep costs under control. Aon’s 2025 U.S. Health Survey provides insights into the choices employers are making, and their potential effects on costs.

Key Takeaways
  1. Employers expect the cost of healthcare to rise 9.2 percent in 2025, up from 8 percent last year. After making plan changes, that increase is 7.3 percent, up from 6.5 percent in 2024.
  2. There are many ways companies are addressing rising costs, the most common being increasing employee contributions by an average of 5.9 percent, up from 5 percent in 2024.
  3. Wellbeing strategies continue to be an important factor — and more likely to be implemented by larger companies with more resources to address rising costs.

In the current U.S. healthcare environment, employers are compelled to make difficult decisions. This means balancing competing and occasionally contradictory interests, like attracting and retaining talent, keeping costs down, and improving both performance and health outcomes for employees. How are employers managing this era of increased costs, paired with increased employee expectations and healthcare needs?

Aon’s 2025 Health Survey sheds some light on the added costs employers are facing, as well as how they are responding. The average projected cost increase across all respondents was 9.2 percent,1 which is in line with the 9 percent projected increase from Aon’s Global Medical Trend Rate Report. The increase is predicted to be slightly higher for small employers at 10.3 percent, and slightly lower for larger employers at 8.3 percent.

Those projections, however, are calculated before employers make plan changes to bring down costs. After plan design changes are incorporated, the projected increase is 7.3 percent, with a similar spread between small and large employers.

Employee Contribution Increase

The number of employers that expect larger increases varies greatly by size. About one in nine small employers expect 20-plus percent increases. However, only 6 percent of midsize companies and less than 2 percent of large companies are seeing such big increases

Keeping Costs Under Control

Four out of every five employers say they are raising the required employee contribution to health insurance. The average increase for 2025 is 5.9 percent, up nearly a full point from 2024. As one might expect, larger employers are able to absorb more of the cost increase, keeping employee contribution increases lower. What is perhaps surprising, though, is that small employers are limiting the increase more than midsize firms.

Increase in Employer Contribution by Employer Size

Smaller employers may recognize the need to control employee costs to attract and retain talent, a challenge they already face when competing with larger employers.

While increasing employee contributions is overwhelmingly the most common strategy used to address rising costs, it is not the only approach. Aon’s Health Survey asked employers what specific actions they are taking. Those specific actions were then aggregated into categories. For example, implementing a new point solution and consolidating or eliminating vendors were both part of the “vendor strategy” category.

Strategies Being Used to Address Costs in 2025 – by Category

Beyond increasing employee contributions, a variety of methods are being used to address costs. These include plan design changes, like incentives to promote high-quality, cost-effective care, better support for members through navigation solutions and wellbeing programs, tighter management of vendors and pharmacy strategies, such as PBM bidding, and more utilization management controls.

Among large employers, pharmacy strategy is second most common at 58 percent, while plan design, vendor strategy, and member support and wellbeing are all being deployed by more than half of respondents. This speaks to the ability of larger employers to pull multiple levers to help keep costs under control.

Conversely, a full quarter of small employers said they are making no changes, more than double the overall number. Whether that’s because of a lack of perceived available options or just a lack of resources to investigate and implement changes, smaller companies will consequently have to pay more.

After increasing employee payroll contributions, the second most common specific action being taken is implementing strategies to manage the cost of diabetes and obesity management drugs known as GLP-1s. This is largely driven by bigger employers, and can include requiring prior authorization, step therapy (meaning a requirement that less expensive drugs or treatments be tried before granting coverage for the GLP-1) and limiting the quantity allowed at each refill. These drugs are responsible for a disproportionate amount of increased overall medical costs. The fact that more than half of large companies are designing strategies to specifically deal with them underscores the growing complexity employers face to provide quality, affordable coverage to their workers.

Specific Actions to Address Costs in 2025

32.4%

of employers are implementing strategies to manage the cost of GLP-1 medications.

It’s important to note that increased employee payroll contributions are not the only lever employers are using to increase costs for their members. More than a quarter of employers across all sizes say they are increasing costs for employees through plan design changes, meaning increasing expenditures like deductibles and co-insurance amounts. Interestingly, there is quite a large spread between the number of small and large companies taking this action.

Employers Increasing Employee Cost Sharing Through Plan Design Changes

As with payroll contribution changes, it may be that smaller employers are not passing along the costs quite as much because they are concerned with attracting and retaining employees.

Wellbeing Strategies are Changing

Across all employer sizes, adding or changing wellbeing strategies — for example, expanding employee assistance program (EAP) access or adding new financial wellbeing programs — was not only the third most popular action taken to address costs, but it was also the only mitigation action mentioned by at least 20 percent of respondents. That speaks to the changing nature of wellbeing from a health issue to a business performance issue.

One possible reason so many employers are dialing up their wellbeing strategies is the growing importance of mental health to employees. As younger generations, who are generally more willing to discuss mental health issues, enter the workforce, there is an expectation that sufficient resources like an EAP will be available. With provider shortages driving up costs, employers are recognizing that solutions like expanded emotional wellbeing programs are an important way of providing attractive benefits.

The Road Ahead for U.S. Benefits

While cost increases are nearly guaranteed to continue in the coming years, employers are realizing that they are not merely passengers on the journey. Rather they can use a variety of tools to craft benefit strategies that embrace their values and provide meaningful support for their employees. By fully embracing wellbeing strategies, using data to drive decisions about plan design and helping employees find high-quality, cost-effective care, employers can provide their workers the kind of benefits they need — and deserve.

30.8%

of respondents are adding or changing a wellbeing program this year.

Talk to Our Team

For more insights on how employers are thinking about health benefits, contact our team.

Contact Us
Aon’s Thought Leaders
  • Janet Faircloth
    Senior Vice President and Thought Leadership Leader, Health Solutions, North America
  • Keri Stuart
    Assistant Vice President, Health Solutions, North America
  • Lindsay Dower
    Assistant Vice President, Innovation and Commercialization, North America
  • Frank Easley
    Practice Leader, Health and Benefits, North America

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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