A new report suggests that organizations are likely to encounter several challenges in 2025 that will impact employee benefit operations and budgeting.
“Recent litigation and U.S. Supreme Court decisions are poised to alter employer compliance obligations, while the potential changes brought by a new presidential administration could reshape the future of health care in America,” Arthur Hall, USI Insurance Services' employee benefits national practice leader, writes in the “Executive Summary of the firm’s “2025 Employee Benefits Market Outlook Report.”
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He also lists artificial intelligence and its effect on human resources departments, trends driving pharmacy costs, and managing health plan spending as other significant challenges.
“As these challenges continue to evolve, employers must find new approaches to address them and remain competitive,” Hall continues. “Leveraging strategic solutions will be essential for optimizing benefits, controlling costs, and supporting employees’ overall wellbeing.”
Here are three key takeaways from the report:
1. Declining health in the United States is driving up employer health plan spending.
Major contributors include increasing rates of obesity, diabetes, and cancer.
“Traditional wellness programs have proven ineffective at reducing costs because of how they are designed,” the report notes. “Strategies like biometric screening and health risk assessments lack the diagnostic follow-up and medical intervention necessary to help prevent and best manage these conditions. Addressing these conditions with targeted solutions can significantly impact employer health plan spending.”
2. Potential changes in how organizations offer health insurance and manage compliance obligations may lead to higher costs and an increased risk of noncompliance for employers.
Recent Supreme Court rulings and a new legislative agenda for health care policy could result in reform of the Affordable Care Act, caps to tax exemptions, and expanded health care options.
“Until further legislation, rulings, or guidance have been issued, employer plan sponsors should continue to comply with existing rules and regulations, and continue to pay careful attention to benefits compliance,” USI officials suggest.
3. A lack of “value-add” use cases is one of the top barriers to incorporating AI into daily HR workstreams.
While AI is helping streamline the hiring and onboarding process, reduce employee turnover, and manage benefits compliance and enrollment, the technology is introducing new obstacles that include knowledge gaps, data privacy issues, and disruption.
“There are concerns about AI removing the ‘human’ from ‘human resources,’” according to the report. “Implemented effectively, these tools should enhance human expertise, rather than seek to replace it. Thoughtful change management strategies will be essential to gain buy-in from all stakeholders and ensure the smooth adoption of AI solutions.”
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