Employers enhanced health benefits in 2024, adding coverage for weight-loss medications and IVF despite growing health costs, Mercer survey finds
United States, New York
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, released results from its 2024 National Survey of Employer-Sponsored Health Plans.
The survey found that the average per-employee cost of employer-sponsored health insurance reached $16,501 in 2024, an increase of about 5% year over year, with employers expecting an increase of about 6% in 2025.
“Employers doubled down on strategies to manage cost growth while finding ways to improve key benefits to support employees and their families in 2024, including expanded coverage for GLP-1 medications and fertility treatments,” said Ed Lehman, Mercer’s US Health Leader.
The fastest-growing component of health benefit cost continues to be prescription drugs. Pharmacy benefit cost rose 7.7% in 2024, following an increase of 8.4% in 2023. One driver of this spend is the growing utilization of GLP-1 drugs for diabetes and weight loss.
While nearly all health plans cover GLP-1 drugs for diabetes, that is not the case for obesity treatment. However, in 2024, coverage for obesity drugs rose to 44% of all large employers (those with 500 or more employees), up from 41% last year. Of the largest employers (20,000 or more employees), 64% now offer coverage, up sharply from 56% 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 US Health Policy. “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 managing the rising cost of specialty drugs, including expensive gene and cell therapies for conditions such as hemophilia and sickle cell disease. The most common strategy to curb costs is working with medical carriers and pharmacy benefit managers to implement clinical management programs for patients.
Addressing affordability with more medical plan choices
Concerns about affordability have led employers to add medical plan choices that accommodate different financial and medical needs. This year, 65% of large employers offered three or more choices to employees, up from 60% in 2023, with the largest employers providing an average of five options.
One lower-cost option is an Exclusive Provider Organization (EPO) plan, which uses a closed provider network to help keep cost down. In 2024, 12% of all large employers and 29% of the largest employers offered an EPO option. Notably, about a third of these plans do not require a deductible, which is rare among Preferred Provider Organization (PPO) plans and not permitted for Health Savings Account (HSA) eligible plans. Currently, 5% of all covered US employees are enrolled in an EPO.
Promoting higher quality care
Many of the EPO plans offered by the largest employers (40%) incorporate a high-performance provider network, in which providers are selected based on quality and cost metrics, as do 10% of the PPO plans. “By steering employees to providers of demonstrated quality and cost efficiency, better outcomes and cost savings result, a win for both employees and the plan sponsor,” said Ms. Watts.
Another way to guide employees to higher quality, cost-efficient care is by providing specialized health navigation or advocacy services. Nearly half of all large employers (49%) have contracted a specialized vendor or purchased enhanced services from their health plan to provide assistance beyond standard customer service.
Family-forming benefits
Coverage for fertility treatment is becoming increasingly common, with in vitro fertilization (IVF) now covered by 47% of all large employers, up from 45% last year. Of the largest employers, 70% cover IVF, up from 62%. Elective egg freezing and elective sperm freezing are covered by 21% and 20% of all large employers, respectively.
Most large employers offering fertility benefits (64%) say that they are intended to be inclusive, meaning eligibility is not limited to those meeting the clinical definition of infertile. “Fertility benefits have become table stakes for employers wanting to offer comprehensive, inclusive benefits,” added Ms. Watts.
Cancer support and other benefit enhancements
Employers are increasingly providing specialized support to employees dealing with cancer, including prevention and early detection campaigns, Centers of Excellence, case management, caregiver resources and workplace support. Two-thirds of large employers now provide at least one of these resources, with 20% of the largest employers having a robust cancer strategy and another 24% actively developing one.
Virtual primary care, offering convenient, low-cost access to physicians via text messaging, is a popular benefit that can enhance healthcare accessibility. In 2024, 20% of all large employers and 27% of the largest employers provided this service.