Employers expect worker healthcare costs to jump 6% in 2025, the highest amount in three years, according to research conducted by Mercer. And while some companies have been adding benefits for women and family planning, they are also experimenting with new types of health plans and programs in an attempt to improve outcomes and lower costs.
Almost 62% of employers will offer one or more benefits to help women with issues such as high-risk pregnancies, pre-conception planning, postpartum mood disorders, and menopause. That’s up from 46% this year. Nearly half of large employers covered IVF this year, up from 45% in 2023.
“There’s definitely an element of inclusivity tied to making fertility benefits available to all types of families,” said Beth Umland, director of research, health, and benefits, at Mercer. “We’ve seen quite a bit of growth in that area, and we’re seeing it again this year.”
The research found that 35% of companies either offer or will next year introduce a fertility testing benefit for men, while 20% said the same for sperm freezing.
“As you are going through infertility treatments, historically, men have just not been included in the conversation,” said Linsay Bower, senior principal of total health management at Mercer. “The focus here is really trying to get men involved in that conversation earlier, so ensuring they’re getting the education and the support kind of along the infertility journey.”
Fertility benefits can be expensive. For example, a single IVF cycle is estimated to cost anywhere from $15,000 to over $30,000, according to the US Department of Health & Human Services. The agency said it takes an average of 2.5 cycles to become pregnant, so achieving that result could easily cost over $40,000. Employers are grappling with other high-cost products and procedures. For example, the new type of drugs for diabetes and obesity typically cost $1,000 a month, though that doesn’t include manufacturers’ rebates, which vary, Mercer said.
Inflation is also pushing up the cost of healthcare, Umland said. She added healthcare inflation lagged overall inflation because the price of many products and services was covered by contracts, keeping costs low. Prices increased as contracts expired.
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One way employers are attempting to lower costs is through implementing high-performance networks (HPO). These are networks of specially selected providers that are chosen because of their proven ability to offer high-quality care. HPOs are typically part of a broader preferred provider network, though employees receive financial incentives such as lower cost-sharing if they use the (HPO). Mercer said that 17% of companies have such networks in place or plan to offer them next year, while another 25% are considering them for 2025 or 2026.
“The beauty of them (HPOs) is the win-win aspect,” said Umland. “We have the metrics, and the ability to find providers who have demonstrably better outcomes, or who meet other quality standards and who are also cost-efficient, who are not ordering way above average numbers of tests or sending people for MRIs above what seems like the normal amount.”
Unland added that employers are looking for new ideas because the use of consumer-driven plans, which were supposed to lower costs, has plateaued. Additionally, she said those plans weren’t effective for certain people, such as those who visited doctors frequently and those who couldn’t afford to put money into health savings plans.
Social determinants such as living in areas lacking opportunities to buy nutritious and fresh food also affect employees’ health outcomes. Around 20% of employers have either started to or plan to research such variables and develop plans to address them. For example, employers could work with food banks to help workers gain access to better groceries or transport to stores, said Vikki Walton, health equity leader at Mercer. “We’re in the early forefront of this,” Walton said. “There are a host of ideas and solutions that employers are considering. It starts with just acknowledging that there may be some challenges with some of your employees, particularly in rural populations.”