Open enrollment has always been one of the busiest times of year for brokers, and 2025 is no exception. Costs are climbing, new therapies are raising tough questions about coverage, and employees are placing higher expectations on their benefits. Employers are leaning on brokers to help them chart a path forward that offers employees value while minimizing cost.
A look at the current market
The first step is understanding where the market is heading. According to recent industry surveys, employer-sponsored health plan costs are projected to rise between 6% and 8% in 2025. Inflation, specialty drug costs, and growing demand for mental health services are all contributing to the increase. Meanwhile, employees still expect robust health benefits even as costs rise – in fact, health insurance is consistently ranked as one of the most important benefits an employer can offer workers and their families.
Employers are responding in different ways. Some are leaning more heavily on high-deductible health plans (HDHPs) paired with Health Savings Accounts (HSAs). Others are expanding supplemental benefits like telehealth, wellness stipends, or mental health resources as lower-cost ways to meet employee expectations.
Another factor shaping open enrollment this year is regulation. There are many potential changes on the horizon and one in particular deserves brokers’ attention: the possible expiration of enhanced Affordable Care Act premium tax credits offered by the government marketplace at the end of 2025. If these subsidies expire, employees who currently rely on them could see sharp increases in their premiums. That may push more people back toward employer plans. While higher participation can positively support an employer plan through increased total premiums, it also raises total costs for employers and could trigger potential Affordable Care Act penalty implications. Brokers should be proactive in flagging this issue, helping employers understand both the risks and opportunities.
The weight loss drug debate
Few topics have dominated benefits conversations recently as much as GLP-1 weight loss drugs. These therapies have proven effective in treating obesity and related conditions, but they also come with steep costs – often exceeding $10,000 annually per patient.
The key considerations about whether to cover these drugs often comes down to cost, workforce health and employee demand. On one hand, these drugs could increase plan expenses substantially, but may reduce long-term related claims for diabetes, cardiovascular disease and other chronic conditions. Rising interest also means demand is increasing, making it an important consideration for offering a competitive benefits package among employees. Some employers are even experimenting with conditional coverage – covering GLP-1 drugs when prescribed for diabetes, but not for weight loss alone.
All that said, this is a rapidly evolving area, and the conversation will keep shifting as new policies emerge. Brokers should be ready to walk employers through both the cost side and the employee perspective. It also helps to remind clients that plan choices aren’t static, and reviewing claims and data each year is essential to staying on track.
Weigh the pros and cons: Evaluating plan options
Of course, brokers also must help employers make sense of the basics – choosing between traditional plan structures. Here’s a quick refresher on the pros and cons of common options:
- Flexible Spending Accounts (FSAs): Allows employees to set aside pre-tax dollars for health care expenses. They’re attractive for lowering taxable income but carry the well-known “use it or lose it” rule.
- High-Deductible Health Plans (HDHPs): These plans continue to gain traction for lowering premiums, particularly when paired with HSAs. Yet, they can also shift significant out-of-pocket risk onto employees.
- Health Savings Accounts (HSAs): Available only with HDHPs, HSAs combine tax advantages with rollover potential, making them powerful long-term savings tools. However, high deductibles can be a financial barrier for some employees.
- Preferred Provider Organizations (PPOs): Popular due to flexibility in provider choice and ease of access without referrals, but the trade-off is typically higher premiums.
Ultimately, there’s no one-size-fits-all solution. The right plan depends on a company’s workforce, budget and culture. Brokers play a crucial role in guiding employers through these trade-offs, helping them balance cost, coverage, and employee needs to find a solution that works for everyone.
How to prepare for a challenging season
From rising costs to evolving plans and debates surrounding the coverage of weight loss drugs, this year brings both new and familiar challenges. Brokers who stay ahead of these trends will be well-prepared to help employers make informed decisions that balance cost, competitiveness and employee wellbeing.
Partnering with PEOs can also be a valuable part of that strategy. By expanding plan access, simplifying administration, and offering insights into how other employers are handling similar decisions, PEOs can give brokers additional tools to support their clients. When preparing for open enrollment, brokers can leverage these partnerships, alongside their own expertise, to help employers make confident, competitive choices – strengthening their role as trusted advisors in a rapidly evolving benefits landscape.
Denise Stefan is the president at Engage Insurance. Denise leads strategic planning efforts and directs the company in fulfilling its mission of providing stable, cost-effective insurance solutions to Engage PEO clients.
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