In Canada, the average health benefits cost trend for 2025 is estimated to be 7.4 per cent, up from five per cent in 2024, according to a new report by Aon.
It found the top medical conditions driving health benefits plan costs are diabetes, autoimmune diseases (excluding diabetes), mental health, lung disorders/respiratory and cardiovascular and weight loss.
Read: U.S. employers projecting health benefits cost increase of 8% for 2025: survey
In Canada, glucagon-like peptide-1 drugs added roughly 1.2 per cent to the expected trend for 2025. In the U.S., specialty drugs remained the leading factor in spending, even though they represent just a small fraction of overall utilization.
The two global regions with the highest projected trend rate increases versus last year were Asia-Pacific at 11.1 per cent (up from 9.7 per cent in 2024) and North America at 8.8 per cent (up from 7.6 per cent in 2024). Notably, these were the two regions with the lowest increases from 2023 to 2024.
Managing costs was cited as one of the top three objectives for global benefits teams. To mitigate rising costs, 35 per cent of companies said they’re prioritizing data analysis of their disability and health claims data to understand trends and support targeted interventions.
Read: 58% of global insurers anticipating health benefits cost increases over next 3 years: survey
A third of global employers reported actively considering alternative global benefits financing arrangements and more than half agreed it was critical to integrate benefits with well-being.
The report also forecasted health benefits plan costs across the world will rise, on average, by 10 per cent, just shy of the projected increase for 2024 of 10.1 per cent, which represented the highest increase forecasted in 10 years.
“As employer-sponsored medical plans become a larger part of total rewards spend, we are seeing businesses leverage trend rate data to inform their budgets and benefits strategies,” said Kathryn Davis, vice-president of global benefits at Aon, in a press release. “Well-being initiatives are again the leading mitigation strategy as they help to control costs by encouraging utilization of preventative care and by keeping employees engaged in their well-being.”
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