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According to data from the International Foundation of Employee Benefit Plans (IFEBP), which has 31,000 member employers, a 10% increase in healthcare costs is forecasted for next year. These figures have risen from the 8% increase that surveyed employers anticipated in 2025.
Catastrophic claims, costly specialty and prescription drugs, including GLP-1 injectable weight-loss medications and cancer drugs, and stagnant wage growth are among the factors driving the expected increase.
For instance, employers may soon rethink coverage for the popular GLP-1 drugs, which cost about $1,000 per month per patient. Many employers cite the increasing demand for these drugs as one of the major reasons for continually increasing healthcare costs. Even though employers initially embraced the drugs to improve weight loss and better health outcomes for employees, the astronomical cost is now making them think twice.
As a result of these issues, employers may turn to cost-sharing, plan redesign, provider initiatives, and other means of containing costs. According to IFEBP, about 27% of employers report passing along more costs to employees in the form of increased deductibles, copays, and annual premiums. This figure is up 21% from employers surveyed in 2024.
Mercer also released data showing that significantly more employers (about half of "large" employers or those with 500 or more employees) intend to make changes to their benefit plans next year that will shift more costs to employees. In 2024, only about 6% of large employers reported the same intent.
Other potential plan design modifications to contain employer costs include conducting dependent eligibility audits, offering high-deductible health plans, and implementing initiatives such as telemedicine, price transparency tools, and centers of excellence. Employers also reported the potential for changes to control utilization by instituting more prior authorization procedures and nurse advice lines. However, those changes were reportedly not as popular as cost-shift strategies.
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