According to a recent survey by the International Foundation of Employee Benefit Plans (IFEBP), U.S. employers expect healthcare costs to rise by 8% by next year.

This jump is larger than the 7% increases forecast for 2022 and 2023 and highlights how rapidly health spending is rising, leading to higher costs for workers.

The survey revealed a few key factors driving the increase in costs. First, there are catastrophic claims, expensive, rare incidents that can put a strain on a company’s health insurance. These types of claims have increased slightly from last year, from 19% to 20%.

Added to this are the rising costs of specialty drugs such as GLP-1 and cell and gene therapy drugs. 75 percent of survey participants named GLP-1 drugs, which are often used to treat diabetes and for weight management, as the main cost driver.

Other factors include rising healthcare costs and the ongoing challenge of managing chronic conditions such as diabetes and heart disease.

Given these key factors, employers are getting creative in their cost control efforts.

For example, the report shows that employers are using strategies such as utilization monitoring, which uses tools such as prior authorizations and case management to ensure that health care is necessary and used efficiently.

Another tactic is cost sharing, where employees pay a larger share of healthcare costs through higher deductibles, copayments and premiums. These approaches help control costs but also shift more financial responsibility onto employees.

In addition to these methods, according to Aon’s recent 2024 U.S. Health Survey, improvements to the annual health insurance enrollment process are also planned.

Employers see improving the enrollment process as an important opportunity to reduce costs while improving the overall employee experience, the report says.

By offering personalized plan selection tools and a choice of different insurance carriers, employers can help employees make better decisions that meet their financial situation and health needs, the report said.

For example, Aon’s Help Me Choose benefit experience tool helps employees evaluate their Health Savings Account (HSA) balances and their ability to manage unexpected costs.

This tool has enabled Aon customers to save an average of $423 in premiums annually.

Flexibility is also becoming increasingly important, according to the Aon report, as workers look for health insurance plans that can adapt to their changing life circumstances, whether they are starting a family, saving for the future or managing ongoing medical expenses.

For example, 94% of respondents in the report said they would like more choice in health insurance providers, underscoring the need for plans that are both flexible and accessible.

Given the rising cost of specialty drugs, particularly GLP-1, these price increases are forcing employers to rethink their drug prescribing practices. The report suggests more aggressive strategies, such as tighter drug list management or negotiating more favorable terms with drug manufacturers.

As employers prepare for 2025, the combination of utilization control, cost sharing, personalized enrollment processes and innovative plan design shows that these methods of managing health care costs may be just the beginning of solving the problem.