Navigating Healthcare Benefits in 2025: Essential Insights for Employers

Understanding the Current Healthcare Landscape and What Employers Must Prepare For

In 2025, the American healthcare system remains a significant source of frustration and concern for employers and employees alike.

Regardless of political affiliation, there is widespread consensus that the existing healthcare framework is complex, costly, and difficult to navigate.

Healthcare reform debates have long been a staple of American politics, yet the recent surge in dissatisfaction highlights growing challenges in both affordability and accessibility.

A major factor contributing to this discontent is the steady escalation in healthcare expenses.

According to research conducted by the Kaiser Family Foundation, from 2008 through 2022, the average per enrollee cost for private health insurance surged by an alarming 61.6%.

Concurrently, claims denial rates have risen nationally, averaging about 19% in recent years.

Such figures paint a grim picture for employers tasked with providing comprehensive yet cost-effective benefits packages.

Adding further complexity to this environment is the anticipated shift in healthcare policies following administrative changes, coupled with an increase in litigation targeting Plan Sponsors — a scenario reminiscent of the legal challenges faced in the retirement plan arena during the late 2000s.

With these pressures mounting, employers face an uphill battle in balancing employee expectations against financial sustainability.

Forbes recently revealed that approximately two-thirds of American workers consider employer-sponsored healthcare the most critical benefit when deciding on a new job.³

In this comprehensive guide, key healthcare benefit issues that employers should closely monitor throughout 2025 are examined.

Strategic planning and informed budgeting will be vital to managing these evolving challenges effectively.

Ongoing Legal and Regulatory Battles Surrounding Preventive Care Coverage Under the Affordable Care Act

Background and Scope of the Preventive Care Mandate

Under the Patient Protection and Affordable Care Act (ACA), commonly known as Obamacare, most health insurance plans are required to cover certain preventive services without imposing any cost-sharing on patients.

This mandate includes a variety of essential benefits such as annual wellness exams, maternity care, screenings for sexually transmitted diseases (STDs), immunizations for both adults and children, cancer screenings, and well-child visits.

These services have been identified and recommended by federal agencies such as the United States Preventive Services Task Force (USPSTF), the Health Resources and Services Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP).

 The rationale behind these recommendations is rooted in public health benefits: early detection and intervention for serious medical conditions can result in improved patient outcomes and reduce the frequency of costly emergency treatments.

Legal Challenges and Constitutional Questions

Despite the purported benefits, the preventive care mandate faces considerable opposition.

Critics highlight the escalating costs imposed on employers and plan sponsors and object to certain required services on religious or ideological grounds.

For example, mandatory coverage of pre-exposure prophylaxis (PrEP) for HIV prevention and contraception have become points of contention.

In April 2025, the Supreme Court of the United States (SCOTUS) agreed to hear a pivotal case challenging the constitutionality of the USPSTF’s role in determining covered preventive services.

The challenge was brought forward by Braidwood Management, Inc., and other employers.

The claim centers on the argument that the USPSTF members, who make recommendations that dictate no-cost preventive services, function as “principal officers” who, under the Constitution’s Appointments Clause, should be nominated by the President and confirmed by the Senate.

Further, the employers argue that the ACA’s requirement to cover HIV prevention medication violates the Religious Freedom Restoration Act (RFRA).

In 2022, a Texas District Court sided with these employers, ruling that the USPSTF’s recommendations were unconstitutional due to improper appointments and consequently invalidated preventive care mandates issued after March 23, 2010, including the coverage for PrEP.

The court’s injunction was nationwide in scope.

On appeal, the Fifth Circuit Court of Appeals upheld the finding regarding unconstitutional appointments but narrowed the injunction’s reach, limiting enforcement to the plaintiffs and similarly situated parties rather than across the entire country.

The court also declined to extend similar rulings to the ACIP and HRSA, remanding those issues for further review.

SCOTUS’s forthcoming decision will clarify whether USPSTF members are considered “inferior officers,” whose appointments were lawful, and whether the District Court erred in applying a broad injunction.

Notably, SCOTUS declined to review whether all ACA preventive care provisions violate the non-delegation doctrine, preserving benefits recommended before the ACA’s effective date.

Recommendations for Employers in 2025

Until SCOTUS issues its ruling, it is advised that employers subject to the ACA continue to provide preventive services as mandated, without cost-sharing.

Should the challenge succeed, there may be an opportunity to reintroduce cost-sharing mechanisms for select preventive services, potentially reducing short-term expenses.

However, it is crucial to understand that federal law establishes minimum coverage requirements and does not limit plans from offering additional benefits.

Imposing cost-sharing on preventive care may lead to delays in patients seeking treatment, which could escalate into more severe health issues and higher claims costs over time.

Ultimately, this could contribute to a less healthy workforce and increase overall costs.

The Rising Tide of Prescription Drug Costs: Navigating the Impact of GLP-1s and Specialty Medications

Trends in Prescription Drug Spending

Prescription medication costs continue to outpace other healthcare expenses.

According to the 2025 Segel Health Plan Cost Survey, prescription drug spending rose by 11.4%, whereas medical costs grew by 8%.

This disparity largely stems from the increased utilization of novel medications, particularly glucagon-like peptide-1 receptor agonists (GLP-1s), used to treat type 2 diabetes and obesity.

While the monthly cost of GLP-1s—typically ranging between $900 and $1,300 per patient—is moderate relative to some specialty drugs, the rapid expansion of their use has strained employer-sponsored health plans and insurers.

To manage these rising costs, many insurers now offer employers premium “buy-up” options to include GLP-1 medications for weight management in their formularies.

Proponents emphasize that access to GLP-1s reduces the need for more invasive, costly interventions such as gastric bypass surgeries and lowers the risk of serious cardiovascular events like heart attacks and strokes.

Conversely, critics raise concerns about the lack of independent long-term studies, the fiscal impact on healthcare budgets, and adverse side effects that could result in additional high-cost claims.

Moreover, pharmaceutical companies continue to seek FDA approval for expanded GLP-1 uses, including treatment of sleep apnea, kidney disease, and liver disorders.

Biosimilars and Cost-Saving Opportunities

The advent of biosimilars—biologic drugs similar to FDA-approved branded products—was expected to substantially reduce prescription costs once patents expired.

However, their uptake has been disappointingly slow due to safety and efficacy concerns among providers and patients, complicated formulary and reimbursement structures favoring brand-name drugs, and insufficient education.

Specialty Medications: Breakthroughs with a Price

Specialty drugs represent approximately 50% of total prescription spending, despite serving smaller patient populations.

These medications often offer life-changing therapies for individuals with rare or severe diseases but come with extremely high price tags.

A recent gene therapy for Hemophilia B, for example, carries a price of $3.5 million per treatment.

Although this upfront cost is considerable, it may be offset over several years, as typical annual medical costs for Hemophilia patients range between $700,000 and $800,000.

Nevertheless, a single claim of this magnitude could have significant financial implications for employer-sponsored plans during renewal negotiations.

Potential Effects of Pharmaceutical Import Tariffs

On April 8, 2025, the Trump Administration announced intentions to impose tariffs on pharmaceutical imports.

Given that the U.S. imported over $210 billion worth of pharmaceuticals in 2024, such tariffs could dramatically increase drug prices, impacting both consumers and plan sponsors.

The Mental Health Parity and Addiction Equity Act Under Scrutiny: What Employers Need to Know

Overview of MHPAEA and Regulatory Complexity

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 requires group health plans to provide mental health and substance use disorder benefits comparable to medical and surgical benefits.

However, the law’s enforcement has been complicated by intricate regulations concerning quantitative treatment limitations (QTLs), such as visit caps and copays, and non-quantitative treatment limitations (NQTLs), including provider network design and utilization management.

The Consolidated Appropriations Act of 2020 (CAA) reinforced these rules, mandating comparative analyses by insurers and plans to demonstrate parity in treatment limitations. Since 2021, such analyses must be made available to federal agencies upon request.

Despite these efforts, compliance has been difficult, leading to many plans being found non-compliant.

The 2024 Final Rules and Litigation

In response to ongoing enforcement challenges, the Departments of Labor, Health and Human Services, and Treasury published final rules in September 2024 (the “2024 Final Rules”), which strengthen NQTL standards, expand comparative analysis requirements, and ban discriminatory practices in mental health benefit design.

However, the ERISA Industry Committee (ERIC) filed suit in early 2025 challenging the constitutionality and administrative validity of the 2024 Final Rules, arguing they impose vague, burdensome requirements on health plans and violate federal laws.¹²

On the same day, a government report acknowledged progress by employers in MHPAEA compliance but noted significant gaps remain.

The ERIC Legal Center expressed concerns that these rules may jeopardize employers’ ability to provide affordable, high-quality mental health coverage.

Implications for Employers in 2025

Prior to these new regulations, MHPAEA compliance already presented significant administrative and financial challenges, increasing healthcare plan costs.

If the 2024 Final Rules withstand legal challenges, employers and insurers can expect increased costs related to monitoring, reporting, and plan design modifications.

Uncertainty remains about enforcement vigor under the current administration and the effects of recent staffing reductions at key federal agencies.

Employers should closely track developments and proactively budget to meet potential new requirements.

Conclusion: Proactive Steps for Employers in an Evolving Healthcare Benefits Environment

The healthcare benefits landscape in 2025 is shaped by significant legal challenges, escalating drug costs, and regulatory changes aimed at ensuring parity and equity.

Employers are advised to stay informed on pending Supreme Court rulings regarding preventive care mandates, prepare for rising prescription drug expenses driven by GLP-1 medications and specialty drugs, and monitor litigation and regulation affecting mental health parity enforcement.

Strategic planning, including collaboration with carriers, PBMs, legal counsel, and benefits consultants, will be critical in managing costs while maintaining competitive, compliant benefits offerings that meet employee expectations.

By anticipating these challenges and budgeting accordingly, employers can better navigate the uncertainties of 2025 and position their organizations for long-term success in employee healthcare benefits administration.