Lower Healthcare Costs: Key Takeaways from National Employer Health Data

As healthcare costs continue to climb, employers are feeling the pressure to do more with less. To help employers make sense of the latest healthcare trends, The Alliance recently hosted a webinar moderated by Melanie Schoenemann, Vice President of Business Growth & Member Strategy, featuring experts from KFF, the leading health policy organization in the U.S. Mathew Rae, Associate Director of the Program on the Health Care Marketplace, and Lynne Cotter, Senior Health Policy Research Manager, Program on the ACA explained the results of KFF’s 2025 Employer Health Benefits Survey, providing a data-driven look at the state of employer-sponsored health coverage in the United States, and what it means for businesses, employees, and the future of healthcare.

You can watch the full webinar and access additional resources here. Continue reading to get the most important insights.

Insurance Costs Are Skyrocketing

The cost of health insurance continues to outpace wage growth and inflation, putting a strain on employers and employees. According to KFF’s latest data, the average annual premium for a family of four reached $27,000 in 2025, a 6% increase over 2024.

For context, premiums have increased by 22% over the past five years and by more than 47% over the past decade. While employers continue to shoulder the majority of this cost, employees are paying more too, both in premiums and out-of-pocket expenses.

Rae noted that these cost increases are not limited to any one sector or employer size. “Even large employers, who have greater bargaining power, are finding it difficult to absorb the year-over-year increases,” he said.

Drug Price Increases: The GLP-1 Effect

Prescription drugs remain a major cost driver in employer-sponsored health plans and the rise of GLP-1 medications for weight loss and diabetes management is reshaping spending trends.

According to Rae and Cotter, employers are increasingly concerned about the sustainability of drug spending, especially as demand for GLP-1s grows. These medications can cost over $12,000 annually per patient, and many employers are struggling with how to cover them responsibly.

While GLP-1s offer promising health benefits, particularly for individuals managing obesity or diabetes, their high price has had a noticeable impact on total prescription drug spending.

Cotter noted that employers are taking varied approaches:

• Some have chosen to exclude weight-loss-only indications from coverage.
• Others are implementing step therapy or requiring prior authorization to ensure appropriate use.
• A growing number are looking at outcomes-based contracts to link payment more closely to results.

Ultimately, the challenge underscores the need for better price transparency and accountability in the pharmaceutical supply chain.

Deductible Dilemma

While premiums rise, employees are also paying more at the point of care. The average deductible for employer-sponsored health plans reached $1,900 in 2025, up from $1,735 in 2024. For workers in small firms, the average deductible is even higher, often exceeding $2,500.

As Rae explained, “We’re seeing a continued shift of costs onto employees through higher deductibles and coinsurance. This may control employer spending in the short term but raises concerns about delayed care and financial stress.”

Mental Health Access Remains a Struggle

Even as mental health benefits expand, access remains a persistent challenge. KFF’s survey found that only 70% of employers believe their health plan networks include enough mental health providers.

The demand for behavioral health support continues to rise, yet provider shortages, especially in rural and underserved areas, leave many employees waiting weeks or months for care.

Cotter emphasized that this issue goes beyond coverage. “Employers are doing more to offer mental health benefits, but availability and affordability remain barriers. Networks may look good on paper, but employees still struggle to find an in-network provider who is accepting new patients.”

Employers are responding by:

• Expanding tele-mental health services, which now make up a large share of behavioral health visits.
• Partnering with employee assistance programs (EAPs) or digital mental health platforms to fill gaps in access.
• Focusing on destigmatizing mental health conversations in the workplace.

As more employers view mental health as integral to productivity and retention, this area remains a top priority for innovation and investment.

Primary Care and Payment Innovation Are Gaining Momentum

Amid cost pressures, employers are exploring new models of care delivery that emphasize prevention, coordination, and convenience. Two trends stood out in the data:

Direct Primary Care (DPC)

In the Direct Primary Care model, employers pay a flat fee per employee for unlimited access to a dedicated primary care provider. This model reduces barriers to care, improves patient relationships, and can lower total healthcare costs through earlier intervention.

Variable Copay Plans

These benefit designs encourage employees to choose higher-value providers by offering lower out-of-pocket costs when they do.

While adoption rates remain modest, Rae noted that interest is growing, especially among self-funded employers seeking to align financial incentives with quality outcomes.

“These models give employers more control and better data,” he said. “They can see which providers are delivering the best outcomes at the best price and design benefits accordingly.”

The Bottom Line

The 2025 KFF Employer Health Benefits Survey paints a clear picture: healthcare costs continue to rise, affordability remains a concern, and employers are searching for solutions that balance cost control with access and quality.

As Schoenemann noted during the discussion, “Employers have more influence than they realize. By collaborating, sharing data, and aligning incentives, they can help drive the system toward high-value healthcare.”

The challenges are real, but so are the opportunities. The insights shared by KFF highlight a simple truth; employers hold the key to bending the medical cost trend together.

That’s the mission at the heart of The Alliance’s work, to help self-funded employers take control of their healthcare spend while ensuring employees receive the care they need.

The Alliance can help you understand your healthcare data for the benefit of your business and your employees. Reach out to schedule a free consultation.