Employers’ health costs are expected to rise by an average of 9% next year, according to a new report from Aon.
The analysts estimated that the average cost for employer-sponsored care would top $16,000 per employee in 2025. This is notably higher than the increase employers felt between 2023 and 2024, which was 6.4% after they deployed cost-saving options like increasing employee cost-sharing.
The 9% estimate does not account for any similar moves in 2025, the Aon researchers said.
The average budgeted healthcare cost in 2024 is $14,823 per employee, the study shows.
“In the healthcare sector, both rising employment levels and wage increases fueled by economy-wide inflation during the past few years are pushing healthcare costs higher,” said Debbie Ashford, the North America chief actuary for Health Solutions at Aon, in a press release. “To keep pace with these pressures, the healthcare industry negotiates higher prices, which in turn emerge as higher medical trends.
The analysts said that medical claims continue to at “elevated levels,” while costs for prescription drugs are also on the rise due in large part to specialty medications as well as the increased demand for GLP-1s.
Ashford said that demand is not expected to wane, and Aon projects that the GLP-1 category alone will drive a 1% aggregate healthcare cost increase.
While employers’ costs rose by 6.4% in 2024, employee’s out-of-pocket costs rose by 3.4%. The researchers noted that these figures do mark significant jumps from the past several years. In the five preceding years, employer costs on average rose by 4.4% each year while out-of-pocket costs for employees grew by 1.2%.
In 2024, employees are contributing on average $4,858 toward their health coverage. Of that, $2,867 is paid out in premiums and $1,991 comes from deductibles, copayments or coinsurance, according to the report.
“Employers continue to bear the brunt of rising healthcare costs,” said Farheen Dam, North American Health Solutions leader at Aon, in the release. “Plan sponsors are wary of passing significant expenses onto plan participants, striving to keep benefits affordable.”