Latest news with #EdLehman
Yahoo
16-07-2025
- Health
- Yahoo
Employers are scrambling to cut costs and health care benefits are on the chopping block
Good morning! Health care costs have been rising for years, and finding a way to shoulder that burden and keep benefit prices low has been top of mind for employers. But companies are reaching their limit, and becoming more willing to push costs onto their employees, according to a new report. Around 51% of companies say they're likely or very likely to make design changes to their plans in 2026 that will place a larger burden on employees, according to a new study from HR consulting firm Mercer. That's up from 45% last year. Their methods are expected to include raising deductibles and out-of-pocket maximums for employees. Health care costs for workers are already up. The average costs of those benefits are expected to grow by 5.8% this year, up from 4.5% last year, according to the report. That's after accounting for any cost-reduction strategies, without which employers estimate that prices could actually rise around 8% this year. This increase in health care costs is largely due to an increase in prescription drug prices. Well over half of employers (61%) are now actively looking for some type of alternative to typical pharmacy benefit contracts. The increased popularity of GLP-1 weight-loss medications, which can cost around $1,000 per month per patient, is also contributing to higher benefit costs. Most organizations (77%) ranked managing the costs of these drugs as their highest priority when it comes to pharmacy benefits. But while the employers said they were more likely to add the coverage for 2025 than drop it, it's unclear if that will be the case next year, according to the report. 'While the trend over the past couple of years has been to add coverage for GLP-1s approved for weight-loss, some employers facing large cost increases in 2026 may feel this coverage is out of reach,' says Alysha Fluno, pharmacy innovation leader at Mercer. 'Employers are weighing the immediate costs of covering these drugs against the potential for generating savings down the road once their workforce's health improves.' In the future, employers may require more documentation from employees who use GLP-1s, increase the eligibility requirements, or limit the number of providers and pharmacies for the medication, according to the report. 'While short-term cost containment actions might be needed to address current budget realities, we also see some employers using longer-term strategies, such as offering narrow network plans, that emphasize high-quality, high-value care,' says Ed Lehman, Mercer's U.S. health and benefits leader. 'These strategies may improve health outcomes or make health care more affordable for employees.' Brit This story was originally featured on Solve the daily Crossword
Business Wire
16-07-2025
- Business
- Business Wire
As health benefit costs continue to surge, Mercer's research reveals that employers face tough decisions regarding their 2026 benefit offerings
NEW YORK--(BUSINESS WIRE)-- Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, today released its Survey on Health and Benefit Strategies for 2026. According to the survey, more employers will likely reduce benefits in 2026 as they try to control fast-growing health benefit costs. In recent years, the tight labor market and concerns about healthcare affordability have made employers reluctant to reduce the value of health benefits by raising deductibles or making other changes that shift more responsibility for healthcare cost to employees. But this year, more employers seem likely to use this tactic to slow health plan cost growth. Half (51%) of large employers (those with 500 or more employees) say they are likely or very likely to make plan design changes in 2026 that would shift more cost to employees, such as raising deductibles or out-of-pocket maximums. That's up from 45% in last year's survey. 'Employers project average health benefit costs to grow by nearly 6% this year, and 2026 may be even more challenging from a cost perspective,' said Ed Lehman, Mercer's US Health & Benefits Leader. 'While short-term cost containment actions might be needed to address current budget realities, we also see some employers using longer-term strategies, such as offering narrow network plans, that emphasize high-quality, high-value care. These strategies may improve health outcomes or make healthcare more affordable for employees." Some employers will pursue other strategies to slow cost growth. According to the survey, 35% of large employers will offer a non-traditional medical plan option in 2026 that seeks to provide employees with higher-quality, more cost-efficient care. Employers offer these alternative plans to provide choices to employees with a range of medical and financial needs. Variable copay plans are one example and typically offer no or low deductibles and set copayments for services based on individual providers' fees. These copays are fixed and communicated up front, giving members the opportunity to select lower-cost providers. The survey found that among the 6% of large employers currently offering a variable copay plan, 28% of their covered employees, on average, chose to enroll in them in 2025. Weight-loss medication cost is a top concern Sharp growth in the utilization of glucagon-like peptide 1 (GLP-1) drugs for the treatment of diabetes and obesity is having a significant impact on prescription drug benefit costs. While employers have long covered GLP-1 drugs for diabetes, fewer than half (44%) of large employers cover the drugs specifically approved to treat obesity. Given the high cost of these drugs (about $1,000 per month per patient, not counting manufacturers' rebates, which vary), and the large number of plan members that could potentially benefit from them, managing this cost is by far the top priority in pharmacy benefits among survey respondents, with 77% saying it is extremely or very important. 'While the trend over the past couple of years has been to add coverage for GLP-1s approved for weight-loss, some employers facing large cost increases in 2026 may feel this coverage is out of reach,' says Alysha Fluno, Mercer's Pharmacy Innovation Leader. 'Employers are weighing the immediate costs of covering these drugs against the potential for generating savings down the road once their workforce's health improves.' More broadly, some employers are evaluating new approaches to providing and managing the costs of pharmacy benefits. Well over half of large employers (61%) are now actively exploring some type of alternative to standard pharmacy benefit contracts that would potentially provide greater clarity about the cost of drugs or specific services offered by pharmacy benefit managers. Well-being and mental health continue to be a priority Employers remain committed to helping employees manage stress and build coping skills, which may help prevent the onset of more serious mental health issues. More than 75% of large employers will offer digital stress management or resiliency resources in 2026, such as mindfulness and meditation apps, or apps grounded in cognitive behavioral therapy. Half (51%) will offer in-person or live online resources for stress management and resiliency, such as individual or group training sessions or coaching. Employers are also providing training for managers on how to recognize employees who are struggling with their mental health, offer support and direct them to resources. This type of training is increasingly recognized as a strategy for fostering a healthy workplace. Nearly 40% of all large employers surveyed – and 60% of those with 20,000 or more employees – conduct mental health training for managers. These efforts may be a response to a growing need. According to Mercer's research, nearly half (45%) of US employees feel stressed most days at work. About Mercer's Survey on Health and Benefit Strategies for 2026 This study includes 711 US-based organizations (504 organizations with 500 or more employees and 207 organizations with fewer than 500 employees). The study was fielded between April 8 and April 25, 2025. Click here to learn more. About Mercer Mercer, a business of Marsh McLennan (NYSE: MMC), is a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit or follow on LinkedIn and X.
Yahoo
16-07-2025
- Business
- Yahoo
As health benefit costs continue to surge, Mercer's research reveals that employers face tough decisions regarding their 2026 benefit offerings
NEW YORK, July 16, 2025--(BUSINESS WIRE)--Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, today released its Survey on Health and Benefit Strategies for 2026. According to the survey, more employers will likely reduce benefits in 2026 as they try to control fast-growing health benefit costs. In recent years, the tight labor market and concerns about healthcare affordability have made employers reluctant to reduce the value of health benefits by raising deductibles or making other changes that shift more responsibility for healthcare cost to employees. But this year, more employers seem likely to use this tactic to slow health plan cost growth. Half (51%) of large employers (those with 500 or more employees) say they are likely or very likely to make plan design changes in 2026 that would shift more cost to employees, such as raising deductibles or out-of-pocket maximums. That's up from 45% in last year's survey. "Employers project average health benefit costs to grow by nearly 6% this year, and 2026 may be even more challenging from a cost perspective," said Ed Lehman, Mercer's US Health & Benefits Leader. "While short-term cost containment actions might be needed to address current budget realities, we also see some employers using longer-term strategies, such as offering narrow network plans, that emphasize high-quality, high-value care. These strategies may improve health outcomes or make healthcare more affordable for employees." Some employers will pursue other strategies to slow cost growth. According to the survey, 35% of large employers will offer a non-traditional medical plan option in 2026 that seeks to provide employees with higher-quality, more cost-efficient care. Employers offer these alternative plans to provide choices to employees with a range of medical and financial needs. Variable copay plans are one example and typically offer no or low deductibles and set copayments for services based on individual providers' fees. These copays are fixed and communicated up front, giving members the opportunity to select lower-cost providers. The survey found that among the 6% of large employers currently offering a variable copay plan, 28% of their covered employees, on average, chose to enroll in them in 2025. Weight-loss medication cost is a top concern Sharp growth in the utilization of glucagon-like peptide 1 (GLP-1) drugs for the treatment of diabetes and obesity is having a significant impact on prescription drug benefit costs. While employers have long covered GLP-1 drugs for diabetes, fewer than half (44%) of large employers cover the drugs specifically approved to treat obesity. Given the high cost of these drugs (about $1,000 per month per patient, not counting manufacturers' rebates, which vary), and the large number of plan members that could potentially benefit from them, managing this cost is by far the top priority in pharmacy benefits among survey respondents, with 77% saying it is extremely or very important. "While the trend over the past couple of years has been to add coverage for GLP-1s approved for weight-loss, some employers facing large cost increases in 2026 may feel this coverage is out of reach," says Alysha Fluno, Mercer's Pharmacy Innovation Leader. "Employers are weighing the immediate costs of covering these drugs against the potential for generating savings down the road once their workforce's health improves." More broadly, some employers are evaluating new approaches to providing and managing the costs of pharmacy benefits. Well over half of large employers (61%) are now actively exploring some type of alternative to standard pharmacy benefit contracts that would potentially provide greater clarity about the cost of drugs or specific services offered by pharmacy benefit managers. Well-being and mental health continue to be a priority Employers remain committed to helping employees manage stress and build coping skills, which may help prevent the onset of more serious mental health issues. More than 75% of large employers will offer digital stress management or resiliency resources in 2026, such as mindfulness and meditation apps, or apps grounded in cognitive behavioral therapy. Half (51%) will offer in-person or live online resources for stress management and resiliency, such as individual or group training sessions or coaching. Employers are also providing training for managers on how to recognize employees who are struggling with their mental health, offer support and direct them to resources. This type of training is increasingly recognized as a strategy for fostering a healthy workplace. Nearly 40% of all large employers surveyed – and 60% of those with 20,000 or more employees – conduct mental health training for managers. These efforts may be a response to a growing need. According to Mercer's research, nearly half (45%) of US employees feel stressed most days at work. About Mercer's Survey on Health and Benefit Strategies for 2026 This study includes 711 US-based organizations (504 organizations with 500 or more employees and 207 organizations with fewer than 500 employees). The study was fielded between April 8 and April 25, 2025. Click here to learn more. About Mercer Mercer, a business of Marsh McLennan (NYSE: MMC), is a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit or follow on LinkedIn and X. View source version on Contacts Media contact:Cassie LenskiMercer+1 214 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
