Health insurance open enrollment season is upon businesses and they could feel some sticker shock when they see their renewal rates. 

The average cost of employer-sponsored health care coverage in the U.S. is expected to increase by 9% in 2025, according to Aon. It says this surpasses $16,000 per employee.

Aon says this is 6.4% higher than the increase that employers experienced from 2023 to 2024. It says on average the budgeted health-plan costs for clients is $14,823 per employee in 2024.

An increase in medical claims continues, along with rising prescription drug costs, Aon says. This is partly due to a growth in specialty drugs and increased utilization of medications for diabetes and obesity, it says.

“In the health care sector, both rising employment levels and wage increases fueled by economy-wide inflation during the past few years are pushing health care costs higher,” said Debbie Ashford, Aon North America chief actuary for Health Solutions, in the release. “To keep pace with these pressures, the health care industry negotiates higher prices, which in turn emerge as higher medical trends.

Kevin Dunn, Decisely CEO, said small businesses will likely see an even higher increase at 14-18%. He said studies often focus on large businesses that have a better cost ratio for healthcare plans. 

About 70% of American businesses hold open enrollment for insurance during November, December, and January, Dunn said. He said, typically, businesses receive their rates about 90 days prior to their open enrollment period. 

“Those with open enrollment in November should already have their rates for 2025 and are seeing some sticker shock,” Dunn said. 

Other businesses will receive rates within the next 30-60 days, he said. 

“Now is the time for them to go out and get a second opinion,” Dunn said. 

Dunn said it is also the time to go to carriers or brokers and ask to see their claims data. Business owners should ask where their cost is at, he said. This includes asking about medical and prescription drug costs. He added if a majority of the costs is from prescription drugs, an employer should ask which prescription drugs. 

“They need to ask to see the claims data to know why they are paying it,” Dunn said. “It will take the sting out of the cost a lot of times.” 

Employers might learn they had three people go to the emergency room that year, including a child, he said. They could also learn someone is being treated for cancer. 

Dunn said knowing you are helping your employees can make the cost worth it. 

He said most carriers and brokers are able to provide claims data when asked. He said the business should shop for another carrier or broker if the data is not available for review. 

Looking at data can also help reduce costs, Dunn said. He said some expensive drugs, such as popular weight loss or diabetes drugs, sometimes have rebate options. 

Businesses can ask their broker or carrier to research if an employee would qualify for a rebate option through the manufacturer or government, Dunn said. 

Aon projects that healthcare costs will increase over the next four years at a rate that is four times general inflation. It says this is three times more than wage increases and more than double the rate of retirement plan contributions. 

The top 2024 priority for employers is to manage healthcare costs, according to an Aon survey. The next three priorities are to attract and retain employees, support workforce health and well-being, and improve healthcare access and affordability.

Society of Collision Repair Specialists (SCRS) members seeking health coverage or shopping for a different option for their employees can visit the SCRS Benefits Center to view coverage plans offered through Decisely.

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