Employers are putting a focus on family planning, affordability and cancer care as they look for ways to improve benefits for workers, according to new survey data from Mercer.
Earlier this fall, Mercer released the first look at initial results from its annual survey of employer-sponsored health plans. That showed employers are bracing for medical costs to rise by more than 5% in 2025 for the third straight year. The full report digs further into how they're responding to these challenges.
Prescription drugs represent the fastest growing portion of employers' spending, with costs rising 7.7% in 2024 after an 8.4% jump in 2023. GLP-1s are a major factor in the cost growth, according to the study.
Most health plans cover these drugs for patients with diabetes, but coverage for obesity is rarer. However, it's growing, the survey found, as 44% of large employers, or those with at least 500 employees, covered them for obesity this year, up from 41% in 2023.
Among jumbo employers, or those with at least 20,000 employees, 64% offer coverage for obesity treatment, according to the report. That increased from 53% of the largest employers in 2023.
“GLP-1 medications may turn the tide on the obesity epidemic and positively impact downstream medical costs,” said Tracy Watts, Mercer’s national leader for U.S. health policy, in a press release. “Cost is clearly a concern, and employers are adding authorization requirements to ensure the medications are used by members who will benefit the most.”
Employers are also facing steep costs in the specialty space as pricey therapeutics continue to move through the pipeline. Most firms are working with manufacturers and their pharmacy benefit manager to implement clinical management programs to manage costs, according to the report.
To address affordability more broadly, employers are taking steps to offer more plan options for workers with the goal of accommodating a broader range of financial and health needs. Mercer found that 65% of large employers provided at least three plan options to employees.
Some are pursuing exclusive provider organization or EPO plans, which have closed provider networks that keep costs low. These plans also do not have a deductible. For 2024, 12% of large employers and 29% of jumbo employers offered an EPO option for their workers, and 5% of employees nationally are enrolled in one.
Forty percent of EPO plans include a high-performance network for providers, where they are selected based on quality and cost metrics. By comparison, this is true for 10% of traditional PPO plans, Mercer said.
By steering employees toward providers of demonstrated quality and cost efficiency, better outcomes and cost savings result, a win for both employees and the plan sponsor, said Watts.
Employers are also focusing on benefits in key areas. For example, the study found that 47% of large employers cover in vitro fertilization, growing from 45% in 2023. Among the jumbo firms, 70% cover IVF services for workers. Sixty-four percent of employers who offer coverage for IVF services do so for people who do not meet the clinical definition of infertility to be more inclusive.
Watts said fertility benefits are "table stakes" for an employer and can serve as a broad signal for inclusivity.
These firms are also pursuing improvements for cancer patients, ranging from prevention and early detection to centers of excellence to caregiver resources. The survey found that two-thirds of large employers employ at least one strategy targeting cancer, with 20% of the largest firms having robust cancer programs.