While no one knows what 2025 will bring from an economic point of view and there are several factors that are beyond the control of organizations, they can implement various strategies to man- age a major expense, namely healthcare.

Healthcare Costs Continue Climbing

In 2024, the average premium for family health coverage rose 4% to exceed $23,000 per year—marking the 15th straight year of increases. Employees are handling a growing share of these costs through higher deductibles and out-of-pocket expenses. In fact, the average deductible for individual coverage has rocketed from around $300 in 2006 to nearly $1,500 in 2024.

With wages lagging, many workers are feeling strained. Per BambooHR's recent survey, half of employees struggle to cover basic living expenses, with 60% paying down debt, which consumes nearly one-third of their income. At the same time, raises have dropped from 6.2% in 2022 to a meager 3.6% in 2024. Two in five salaried workers got no raise last year.

Rethink Compensation Strategy

Given these trends, some employers may consider cutting back health benefits or compensation to protect profits. But reducing health coverage or pay could seriously backfire when talent is already scarce. As one expert notes, replacing workers is incredibly expensive in terms of hiring, onboarding, and lost productivity.

So before scaling back benefits or freezing salaries, organizations should carefully weigh those savings against losing their best people to competitors with better packages. With unemployment below 4%, retention matters more than ever. Employers could get creative with non-cash perks like remote work, professional development stipends, or wellness incentives.

4 Essential Cost Control Strategies

While boosting compensation makes sense for retention, getting healthcare cost growth under control remains critical. Experts emphasize smart benefit design as the best route to affordability. Here are four important strategies organizations should consider employing:

1 – Boost Plan Efficiency

Organizations should consider shopping around for health plans every year and negotiating better rates. Another tactic to employ is to switch pharmacy benefit managers, which can result in major savings. Analytics can also uncover waste on high-cost claims. As one analyst puts it, with medical inflation far outpacing overall inflation, these moves are non-negotiable now.

2 – Make Employees Partners in Benefits

Staff behaviors drive around half of benefits spending. So, companies should consider improving engagement through strong communication about healthcare options and costs, rewards for healthy choices, and annual surveys to capture employee priorities and pain points on benefits. After all, relevant solutions require understanding people.

3 – Rethink Plan Offerings

Businesses should also consider revisiting all elements of health plans to confirm they align with value and affordability, including copays, deductibles, and caps on out-of-pocket spending. Supplemental options such as telehealth should also be considered, while analyzing usage patterns can help right-size investments across the board. One expert emphasizes that an evidence-based approach delivers the most bang for the benefits buck.

4 – Spotlight Mental Health

Despite the lingering stigma, more employers are prioritizing behavioral health, given the massive costs linked to conditions like depression, addiction, and anxiety in medical claims and lost productivity. Thus, organizations should think about promoting mental health resources like employee assistance programs, training managers accordingly, and confirming health carriers offer adequate support. As experts note, supporting mental well-being now benefits workers and the bottom line alike.

For additional Employee Benefits resouces, contact INSURICA today.

Copyright © 2025 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.