Getting ahead of benefit costs in 2025: Eight New Year’s resolutions for HR leaders

In 2024, HR leaders faced unprecedented pressure from senior executives concerned about continually rising healthcare costs. To support HR executives in effectively communicating their narrative in 2025, Alliant has compiled this list of New Year’s resolutions.

The first six resolutions focus on the ongoing increase in healthcare costs, while the last two address emerging issues that you’ll want to stay ahead of as well.

1. We will be clear about what happened last year—and how that might impact our costs next year.

That means pinpointing the biggest contributors to your healthcare bill hikes. Likely suspects:

• Utilization: People are accessing more healthcare, young adults are getting cancer more often, and mental health issues are growing rapidly.
• Provider rates: As labor shortages drive up healthcare wages, hospital systems pass the cost to insurers.
• Drug costs: Specifically, expensive weight-loss drugs and gene therapies.
• Catastrophic claims: Larger and more frequent than ever before.
• Provider access: When members can't access primary care, they use more expensive options or forego care until a condition is serious.

2. We will utilize early-warning analytics to understand our spend and make clear decisions.

That means accessing systems to monitor healthcare expenses and spot emerging claims issues and health conditions.

• If you’re self-insured, analyze your claims data. An experienced consultant has the tools to mine this information for insights, compare your experience to peers, and build models that can predict future trends.
• If you’re fully insured, look for data on similar companies. Get as much information from your carrier as you can. Better yet, find a consultant who can use a multitude of data sources and statistical models to forecast future costs.

3. We will pay more attention to our pharmacy program.

There’s a spotlight on pharmacy benefit managers (PBMs) and their contracts with drug companies. Congress and the new administration are talking about reform, but companies can take steps to lower drug costs now.

• Demand rebates. PBMs often don’t pass the rebates they receive from drug companies to mid-size and smaller employers. But you can bargain for it when renewing a contract, and if your PBM isn’t clear about whether you’re getting the rebates, ask a consultant to compare your drug costs to peers.
• Consider plan rules for expensive therapies. Example: Some employers have instituted programs, often run by specialized vendors, that ensure cost-effective weight-loss treatments. Similar programs may be appropriate for other health conditions.
• Understand the industry’s conflicts of interest. For example, carriers that own PBMs and brokers/consultants that own their own coalitions.

4. We will ensure our members get primary and preventive care.

The best way to reduce healthcare costs is to help members stay healthy.

• Increase primary care availability. Be sure your provider network has sufficient primary care options. Consider on-site primary care or direct primary care vendors (typically, subscription rather than fee-for-service model) to increase availability.
• Promote early disease screening. Build communications and consider incentives that encourage screening for cancer and other preventable conditions.
• Expand ER alternatives. Urgent care centers are a good alternative to ER visits, especially for those without primary care relationships. However, they can be costly, so consider using virtual care for urgent issues and find the best urgent care options in your network.

5. We will advocate for improved employee health.

Most people are overwhelmed (or turned off) by the complexity of the healthcare system, including the plan limits and bureaucracy imposed by insurance carriers. Employers can help.

• Run a consistent communication program. Share clear and simple messages about health and benefits regularly through the right channels. Tailor messages for people with specific health conditions or situations.
• Explore care navigation services. Vendors can provide access to advocates who help members find the appropriate care. Employers can encourage adoption through communication — and by integrating advocacy services with other benefit offerings.
• Monitor plan and program effectiveness. Do services match up with the current health needs of your population? Even if they do, are they being utilized?

6. We will reevaluate vendor contracts.

It’s easier to renew existing relationships, but it’s worth the effort and potential disruption to find the best value for your situation.

• Measure the cost performance of all plan features and point-solution vendors you’ve selected. Do members use them? Do they provide promised benefits? Do they support fiduciary and transparency requirements?
• Negotiate with insurance carriers. Assemble data about your plans, past claims experience, and projected future costs. Explore multiple options for networks, pharmacy benefits, and other variables. Ask when the contracts renew with the health systems your members use most. (Most run for three years.)
• If you’re fully insured, consider joining a captive carrier. Potentially appropriate for companies with as few as 100 employees, they can save money and provide visibility into plan performance. 

7. We will organize our leave management process.

As more states and localities grant employees the right to take leave for family and personal issues, compliance is becoming a significant burden and a potential source of liability for companies.

• Understand your leave liabilities. Know the laws applicable to your organization based on employee work locations.
• Deliberately create a leave management process. Whether outsourced or insourced, track all leave requests, handle them consistently, and document actions taken.
• Stay current with leave requirements in all locations of operation. Be proactive, not reactive, to upcoming legislation.

8. We will avoid liability over fiduciary governance.

ERISA and the Consolidated Appropriations Act of 2021 require employer-sponsored health plans to be administered in the best interest of participants (including reasonable fees) and impose a variety of disclosure requirements. When you follow the first seven resolutions, you will be well-positioned to keep this one. This is important because there have already been class-action suits claiming company plans incurred excessive pharmacy benefit costs in violation of ERISA.

• Ensure a formal process for benefit-related decisions. All involved must understand the legal obligation to make decisions in the best interest of participants.
• Document the process. Record all decisions, including justifications.
• Train your benefit professionals. Provide training on plan fiduciary obligations.

How Alliant can help

As you prepare to realize your benefits resolutions this year, you might add one more: “We will seek guidance from an experienced partner.”

Sophisticated brokers and consulting firms have access to analytical tools, industry intelligence, and vendor relations that can make it much easier to understand your company’s specific challenges and the best ways to manage them.

Alliant’s mission is to provide a forum for innovation and problem-solving through the highest value approach while helping employers grow and protect their businesses. Contact an Alliant consultant today.