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NFP report finds that cost increases across benefits programs are challenging employers to find new ways to deliver value, mitigate risk and contain spending

NEW YORK, Jan. 13, 2025 /PRNewswire-PRWeb/ -- NFP, an Aon company and leading property and casualty broker, benefits consultant, wealth manager and retirement plan advisor, today released its . The report assessed how employers are trying to strike the right balance in providing competitive benefits that support and engage their workforce while navigating an environment of growing fiduciary risk and cost containment pressures. Even as healthcare costs continue to rise, employers remain committed to their benefits programs with only 4% decreasing their healthcare spend this year and 43% increasing it.

"Most employers are at an intersection of a rapidly evolving economic, legislative and political landscape, and healthcare is a key component of this," said Doug Hammond, CEO, NFP. "As employers strive to ensure their employees have access to quality healthcare, they also appreciate the importance of minimizing the costs passed on to their workforce. This requires employers to be proactive and innovative in their approach. As they consider options, it is critical for benefits decision-makers to connect with the right expertise as efforts to ensure organizational success become more complex."

Price Transparency to Curb Costs
Various pieces of healthcare transparency legislation have identified areas requiring employers to meet their fiduciary responsibilities, such as designing an evaluation process for selecting vendors to deploy their health and welfare benefits strategy. Within this environment, nearly three-in-four (74%) employers said they recognize that data analytics are extremely important in developing evaluation processes for their health and welfare vendors.

Transparency legislation is also empowering employers to take greater responsibility and control of their healthcare spend as visibility into the procedural unit cost of care increases. NFP's survey showed that employers are choosing innovative options such as value-based benefits (35%) and direct-to-hospital/provider agreements (27%) to offset costs.

"New price transparency legislation is changing the levers employers can pull to ensure their workforce has access to the highest quality of care," said Kim Bell, head of Health and Benefits, NFP. "As employers' healthcare fiduciary responsibilities expand, successful companies will implement a methodical approach that combines oversight, quality-of-care measures supported by data-driven decision making tools such as TPNet, and strategic partnerships."

Controlling Prescription Drug Spend
Recent high-profile litigation has heightened awareness of fiduciary obligations in pharmacy benefit management. Employers are now seeking more sophisticated approaches to their pharmacy benefit managers (PBMs), with 70% prioritizing the control of prescription drug spend. To help control their pharmacy costs, employers are shifting toward independent benefit management, with 64% choosing either direct PBM carve-outs or coalition participation.

"To control pharmacy costs, employers need a multifaceted approach," said Bell. "Our data clearly shows that employers implementing comprehensive strategies – from carve-out arrangements to robust audit frameworks – are better positioned to control costs while maintaining high-quality benefits for their employees."

Leave Management
The report also looked at leave management policies and found operational inefficiencies. As employers struggle to manage the complexities of leave requirements, more than seven in ten (71%) spend more than four hours on administration for each leave request. Tools like technology-supported or outsourced leave management are growing in popularity to help employers remain compliant.

"Whether the preference is to administer leave requests internally or outsource the administration, the complexity of leave laws, the burden on employers and the potential cost of mismanagement warrant a look at alternative leave solutions available in the market," said Bell.

Wellbeing Offerings to Maximize ROI
Employers continue to face a challenging landscape in helping employees enhance their wellbeing. This makes it crucial for employers to address any wellbeing gaps in their benefits offerings, according to the report. Many employers are expanding their mental health offerings, in part, through support for employees and their families across various life stages — from pediatric and dependent-children mental health services to increased offerings for the "sandwich generation" of caregivers.

Employers are also focused on their physical and social wellbeing programs. The emergence of GLP-1 drugs has drastically shifted attention to comprehensive health and weight management initiatives. There is a particular emphasis on holistic wellness programs that emphasize sustainable lifestyle changes through nutrition, education and exercise. In addition, employers are looking to social wellbeing programs to strengthen workplace connections through approaches that support remote and in-office employees.

"To deliver solutions that meet employee needs, employers should allocate resources where they'll have the greatest impact," said Bell. "A targeted approach focusing on comprehensive wellbeing can strengthen employee engagement, align organizational priorities and provide support across the entire workforce."

About the Benefits Trend Report
NFP's 2024 Benefits Trends Employer Survey and Benefits Trends Employee Survey were administered online in October 2024. They included 515 employee benefits decision-makers working in a human resources role, as well as 1,011 full-time, part-time, self-employed or contract workers spanning diverse industries and environments across the US. In addition, NFP's annual report supports employers with data generated from the company's proprietary benchmarking database of more than 4,000 employers of all sizes.

About NFP
NFP, an Aon company, is an organization of consultative advisors and problem solvers helping companies and individuals address their most significant risk, workforce, wealth management and retirement challenges. We are more than 7,700 colleagues in the US, Puerto Rico, Canada, UK and Ireland serving a diversity of clients, industries and communities. Our global capabilities, specialized expertise and customized solutions span property and casualty insurance, benefits, wealth management and retirement plan advisory. Together, we put people first, prioritize partnerships and continuously advance a culture we're proud of.

Media Contact

Josh Wozman, NFP, 4153186441, [email protected],

SOURCE NFP