With a tumultuous year in health benefits news nearing its end, Business Group on Health has identified rising health care costs, the need for greater vendor accountability and the impending impact of the 2024 election as among the top health and wellbeing trends to watch in 2025.
Each year, Business Group on Health — a nonprofit organization representing employers on critical health, wellbeing, and workforce strategy issues — identifies trends that could directly impact employer efforts in those areas.
“A multitude of factors shape these 2025 trends, including the economy, technology, innovation, the political environment, and the evolving role of employers in the broader health and wellbeing landscape,” Ellen Kelsay, president and CEO of Business Group on Health, said in a statement. “As employers head into the new year, they face formidable challenges stemming from climbing health care costs, which are putting pressure on how employers manage their overall health and wellbeing programs.”
Here are more details on three top trends, according to the organization:
1. Health care costs are growing at historic rates, an impetus for change.
Employers, which have long prioritized cost management, affordability, quality, and outcomes, will heighten their focus in 2025 to address climbing health care costs. For many companies, health care costs in 2023 were higher than anticipated, and cost increases are projected to be higher in 2024 and 2025 than they have been in more than a decade. As a result, Business Group on Health officials say, employers will need to make tough decisions, some of them disruptive — including re-evaluating and possibly disengaging from long-standing partnerships. Near-term disruption may ultimately result in long-term improvements in health care costs and quality, as well as patient experience.
2. Employers will hold vendor partners to higher standards.
Employers will both reassess and streamline their vendor partnerships in the coming year and hold vendors to a higher level of accountability for producing outcomes. To do this, accessible vendor data on cost transparency, quality, and outcomes will be critical to informed employer decision-making. What’s more, employers will explore alternative approaches, including directly contracting with centers of excellence, promoting network arrangements that steer employees toward high-value providers, and looking to emerging copayment-based models to address affordability.
3. Changes in U.S. policy will impact employers and employees.
Changes to key health-focused roles in the presidential administration, Senate and House are expected in 2025. For employers operating in the United States, three major policy areas could dramatically impact their ability to provide high quality, affordable health coverage to employees: safeguarding the tax-free status of employer health plan coverage; protecting Employee Retirement Income Security Act preemption and the ability to offer uniform coverage/programs nationally; and empowering employers to hold vendors accountable through robust transparency and control over vendor fiduciary positioning.
Other top trends for 2025, according to Business Group on Health, include the likelihood of employers’ addressing escalating pharmacy spending; reassessing wellbeing programs; continuing to focus on mental health; helping employees navigate services; and effecting meaningful change in health care.