New research reveals pricey healthcare spending and an opportunity for HR leaders to help optimize benefits usage.
By Gillian Manning
New research from Benefitfocus–a Voya Financial company–found that the total health benefit cost per employer increased by an average of 8% in 2025. The report also notes that total medical and prescription spend only increased 2.4% per member per year, likely driven by the rising cost and utilization of specialty medications.
The biggest cost drivers for medical spend overall are:
- sub-optimal health care usage;
- chronic conditions management; and
- rising pharmacy spend.
The increase is only driven by a small number of members, though, according to Benefitfocus’s analysis, which reviewed enrollment and claims data from hundreds of employers with more than a thousand full-time employees each–representing an approximate 1.8 million employees total.
Their review found that, in 2025, 1% of members accounted for 33.4% of total medical and pharmacy spend. This reveals, Benefitfocus says, the importance of prioritizing high-cost claimant programs, early identification, prescription sourcing, case management, and stop-loss alignment for self-funded employers.
The biggest spending categories in healthcare for employers were:
- pharmacy expenses (30% of total spending);
- outpatient procedures (25%); and
- inpatient stays (15%).
Other notable categories that take up less of the total spend are testing (9%), office/clinic visits (6%), immediate medical attention (5%), recovery (5%), pregnancy (2%), and mental health (2%).
HR professionals who help guide employees may be able to reduce these costs. Nearly two-thirds (64%) of emergency room visits (a major cost driver) are for non-urgent issues that could be handled in more affordable settings, indicating a significant underuse of primary care, urgent care, and telehealth services. Employee-reported barriers to preventative care, however, include:
- forgetting to or not prioritizing appointments (23%);
- having a busy schedule (23%);
- feeling anxious or uncomfortable about medical procedures (23%); and
- believing preventative screenings are unnecessary or are unsure which services qualify as preventative (15%).
These results indicate that, rather than redesigning benefits, employers can increase preventive care utilization by addressing these psychological hurdles. Potential methods for that include sending personalized reminders, clarifying what counts as preventive care, and offering supportive navigation to ease employee anxiety.
“Feeling confident about benefits starts with being informed, educated, and connected—not just during open enrollment, but year‑round,” says Pat Tupper, head of Benefitfocus, Voya. “Every benefits decision has the potential to affect an employee’s budget and well‑being, and with data from more than 1.8 million enrollees, we see clearly how personalized guidance can help employees make optimal, informed choices while helping employers manage costs.”
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