Press Release: 5/19/2025

Technology, Analytics Shape 2025 Employee-Benefits Environment

 

Posted on May 17, 2025

By Stacey Hyland

Editor’s note – Stacey Hyland is the Employee Benefit Practice Leader at global insurance brokerage HUB International in New England.

Massachusetts employers are looking at an 8% increase in health plan costs in 2025, pushed by higher behavioral care and pharmaceutical costs (like for the popular GLP-1 drugs for diabetes and weight loss) even as utilization continues to climb.

Such medical cost trends are likely to cause premiums to rise at a faster rate than in years past. Given that benefits account for an average of $13.17 per hour worked, or 31% of the total budget, employers are looking hard for solutions. And in 2025, the tried-and-true just aren’t enough.

Short-term fixes like removing expensive drugs from their formularies, for example, have downsides: Not only can employees’ long-term health be negatively affected, but additional medical expenses can ratchet up as productivity declines.

It’s not just health plan costs that will be part of the benefits burden in 2025, though. The volatile employment environment puts a premium on smarter benefits strategies overall to attract and retain the talent that bolsters business vitality and resiliency.

The declining population growth rate means there are more jobs than people to fill them. The trend toward automation and use of artificial intelligence may eliminate some jobs but will also lead to new and different ones as the need for AI-trained workers grows.

Employers would do well in 2025 to assess their total rewards accordingly, as training and “upskilling” are among those that are not only important for recruitment and retention, but help create stronger businesses, too. There’s a reason why 80% of employers pay for training and education to ensure their workers develop new skills.

In 2025, small and mid-sized employers increasingly be able to access a more sophisticated family of data-based benefits management tools.

Health plan costs, for example, can be better managed and reduced when data analytics,  clinical informatics and claims data are leveraged to better identify health risk trends and analyze contracts with providers. On another front, data analytics and persona analysis can enable employers to determine where their people are at in their life journey, to craft relevant, personalized benefits that meet their needs.

Read more in the HUB International 2025 U.S. Employee Benefits Outlook.