Employers are bracing for a 6% rise in worker healthcare costs in 2025, marking the highest increase in three years, according to a recent Mercer study. As healthcare costs escalate, companies are increasingly adding targeted benefits for women and family planning while exploring innovative health plans to improve outcomes and manage expenses.
A growing number of employers are addressing women’s health needs. By 2025, 62% of employers are expected to offer benefits addressing high-risk pregnancies, pre-conception planning, postpartum mood disorders, and menopause—up from 46% in 2023. Fertility-related benefits are also expanding, with nearly half of large employers now covering in vitro fertilization (IVF), compared to 45% last year.
“Inclusivity is a key driver behind the expansion of fertility benefits for diverse family structures,” explained Beth Umland, Mercer’s director of research, health, and benefits. This trend reflects a broader push for equitable access to family planning resources.
Efforts to support male reproductive health are also on the rise. Mercer’s study revealed that 35% of companies will offer fertility testing for men, and 20% will include sperm freezing as a benefit. Linsay Bower, Mercer’s senior principal for total health management, emphasized the importance of engaging men in fertility discussions earlier in the process, offering them education and support throughout the infertility journey.
Fertility treatments remain prohibitively expensive. A single IVF cycle costs $15,000 to $30,000, and most people require 2.5 cycles on average to conceive, potentially driving costs above $40,000. Employers are also grappling with the high price of medications like diabetes and obesity drugs, which cost approximately $1,000 per month before rebates.
Inflation has further compounded the challenge, with healthcare costs now catching up to general inflation as contract-protected pricing expires.
One approach gaining traction is the implementation of high-performance networks (HPOs)—groups of providers selected for their ability to deliver high-quality, cost-efficient care. Employees who use these networks benefit from financial incentives like reduced cost-sharing. Mercer’s data shows 17% of companies currently utilize HPOs or plan to by 2025, with another 25% considering adoption by 2026.
“The beauty of HPOs is their win-win nature,” Umland said. “They align quality care with cost efficiency by focusing on providers with proven outcomes and avoiding unnecessary tests or procedures.”
Employers are also reevaluating consumer-driven health plans, which have plateaued in effectiveness. These plans, which rely on health savings accounts and high deductibles, often fail to address the needs of frequent healthcare users or those unable to contribute to savings accounts.
Social determinants of health, such as access to nutritious food and transportation, are also becoming a focus for employers. Around 20% of companies are beginning to assess these factors and develop solutions, such as partnering with food banks or providing transportation to grocery stores. “Employers are just starting to address these challenges, particularly for rural populations,” said Vikki Walton, Mercer’s health equity leader.
As healthcare costs rise, employers are experimenting with diverse strategies to contain expenses while improving outcomes. By addressing the broader determinants of health and expanding equitable benefits, companies aim to create a healthier, more inclusive workforce despite the financial challenges ahead.
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