Wiegers Financial & Benefits is one of Saskatchewan’s largest private financial planning and group benefits consulting firms. More than ever, employees are choosing employers who care, and a custom-designed Group Life and Health benefits plan that helps look after your employees is one of the foundational components of a competitive rewards and compensation strategy. In our latest Benefits news, we speak to rising health benefit costs in 2025.
The spotlight is on rising health benefit costs as we begin 2025, a trend that is impossible for employers to ignore. With costs climbing due to several key factors, organizations must take proactive steps to manage their expenses while maintaining competitive benefit packages. By focusing on strategies tailored to address these challenges, businesses can remain ahead of the curve.
The Driving Forces Behind Rising Health Benefit Costs
The rise in health benefit costs for 2025 can largely be attributed to inflation. As the price of goods and services escalates, healthcare services and prescription medications follow suit. Employers can expect this to directly impact the premiums they pay, further increasing the financial burden on their organizations.
Recent reports project that health benefit costs in Canada are expected to increase by 7.4% in 2025. This marks a sharp change to the 5% increase in 2024, highlighting the escalating financial pressures faced by employers and insurers.[1]
Another significant contributor is the rapid advancement of medical technology and treatments. While these innovations lead to improved patient outcomes, they also carry hefty price tags. The growing demand for cutting-edge treatments only amplifies healthcare spending.
Additionally, the prevalence of chronic diseases adds another layer to the cost equation. Conditions such as diabetes, cardiovascular diseases, and mental health disorders are becoming more common. Managing these requires ongoing care, specialized services, and medication—all of which drive health benefit costs upward.
How Employers Can Combat Rising Health Benefit Costs
To prepare for rising health benefit costs in 2025, employers must take deliberate actions. Here are four practical strategies to consider:
Wellness Programs That Work: Investing in wellness programs can empower employees to lead healthier lives, ultimately reducing healthcare claims. Initiatives focused on fitness, nutrition, and mental well-being can create a healthier workforce and lower long-term costs. Wiegers Financial & Benefits’ own Wellness Partners Program was designed with this in mind.
Reevaluating Cost Sharing:Adjusting cost-sharing arrangements, such as employee contributions to premiums or deductibles, can help organizations balance their budgets. Although these measures may not always be popular, they can be implemented thoughtfully to minimize the impact on employees.
Optimizing Provider Networks: Collaborating with insurers to create narrower networks of high-quality providers can help employers manage costs. These networks steer employees toward cost-effective care without compromising quality, providing a win-win solution.
Leveraging Data for Informed Decisions:Data analytics can uncover key cost drivers and inform plan design changes. By analyzing claims data, employers can pinpoint areas of improvement and implement targeted wellness initiatives.
The Critical Importance of Proactive Planning
Employers cannot afford to overlook the significance of rising health benefit costs in 2025. These costs represent a substantial financial commitment, and their growth could impact an organization’s competitiveness. By taking proactive steps now, businesses can attract and retain top talent through robust health benefits offerings.
As we begin 2025, the need to address rising health benefit costs is clear. Organizations that act decisively will be better positioned to weather these changes while safeguarding their financial health. By prioritizing proactive planning, employers can continue delivering value to their workforce and ensure a sustainable future. Contact us to learn more.
Wiegers Financial and Insurance Planning Services Ltd.
[1] Benefits Canada, “Canadian health benefit costs trend increasing to 7.4% in 2025: report”, November 20, 2024, https://www.benefitscanada.com/benefits/health-benefits/canadian-health-benefits-cost-trend-increasing-to-7-4-in-2025-report/?utm_source=EmailMarketing&utm_medium=email&utm_content=benefitscanada.com&utm_campaign=Benefits-Canada-Daily-Newsletters&oft_id=134114233&oft_k=2artLzMc&oft_lk=2clCje&oft_d=638677011574000000&fpid&m32_fp_id&ctx=newsletter&m32_fp_ctx=DI_MASTER_Relational
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