Meanwhile, employers are facing the largest increase in medical cost trend in 13 years going into 2025. Costs are expected to increase 8% driven primarily by pharmacy drug prices. High utilization and the cost of behavioral care also are contributing to increased medical costs, according to HUB International 2025 employee benefits outlook.

With health insurance premiums rising, employers are reluctant to pass cost increases on to employees. While some employers have tried to save costs by excluding expensive medications like GLP-1s that are being prescribed for weight loss, the short-term savings achieved may ultimately result in higher costs long term.

Related: Employers urged to support caregivers with new benefits

Employee mental health also continues to be a major concern for employers. Nearly 43 million Americans struggle with anxiety and 41% of Americans are dealing with an untreated mental illness, according to the report. These challenges can not only weigh on productivity and retention at work, but they can also contribute to increased healthcare expenses. Four out of five employers have noted an increase in utilization of behavioral health benefits.

“Human-centric” workplaces that emphasize flexible work, collaboration and empathetic management can help combat these challenges. Embracing technology is another avenue employers can take to address productivity, health care costs and employee wellbeing. For example, leveraging data analytics, clinical informatics and claims data can help employers better identify health risk trends and analyze contracts with providers, said HUB. In addition, digital platforms that combine telepsychiatry, digital therapeutics and wellness apps to help manage stress and anxiety are emerging. Employers can upscale the use of digital platforms, improving patient comfort in using such tools and allaying privacy issues, the firm said.