Only about half of U.S. employers surveyed, 52%, say they effectively manage healthcare costs, according to Gallagher.
Almost all the executives, 92%, of the more than 3,500 organizations in Gallagher's 2024 U.S. Physical & Emotional Wellbeing Report said they've experienced health plan premium increases during their most recent renewal, the statement said. Nearly one-quarter experienced double-digit increases.
To deal with steep increases for specialty drugs, many are putting in utilization management, including prior authorization, and more than half are tying weight loss drug coverage to ongoing participation in a weight management program.
"The advantages of new treatments for obesity and excess weight are evident, but the significant cost associated with these medications cannot be ignored," William Ziebell, CEO of Gallagher's benefits and HR consulting division, said in the statement. "Employers that successfully navigate this challenge tend to take a mindful approach to their benefits design. For example, they may require an employee clear a body mass index threshold and actively participate in an employer-sponsored wellbeing program before they cover GLP-1 prescription costs. A holistic strategy, such as this, will likely result in better outcomes, as well as improved employee engagement."
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Some tactics being used by employers are making a dent, Gallagher said.
Most employers surveyed, 80%, offer more than one medical plan, with consumer-directed health plans with health savings accounts among the fastest-growing plan type, the statement said. With about 56% offering the lower-cost consumer-directed plans with HSAs, up by 16 percentage points from 2020, they're also attracting greater employee interest. Almost a quarter of these organizations, 24%, enroll more employees in their CDHP with an HSA than any other plan.
Value-based tactics aimed at tackling chronic disease and directing employees toward centers of excellence for some procedures are also being used, the statement said. Seventeen percent of employers told Gallagher they're reducing employee costs for prescription drugs that treat chronic conditions, and 14% incentivize employees to use designated centers of excellence for specific medical procedures. Incentives include lower out-of-pocket costs, travel accommodations to the site of care, or both, the statement said.
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Mental health support within a company is also a struggle, with 70% noting concerns about the impact of stress and burnout on their employees, but only 42% saying their managers are well equipped to refer employees to mental health support services. Mental health support training for HR personnel and managers is used by 22% of organizations, up 5 percentage points from 2022's survey, the statement said.
"It's important for decision-makers to understand the diverse needs of their workforce and use this as a guide to create a benefits offering that will appeal to them," Ziebell said in the statement. "Where many employers fall short is by failing to communicate when and how to use specific benefits, and their value. By ensuring that employees are well-informed and equipped with the necessary information to utilize their available benefits, employers can improve employee engagement and bolster retention."
This story first appeared in Crain's Chicago Business.
