Health Issues

Following three consecutive years of record enrollment numbers, the upcoming 12^th annual Affordable Care Act (ACA) Marketplace open enrollment season presents another chance for many to obtain health coverage. Additionally, it provides an opportunity for current enrollees to modify their health plans. Below are ten essential points to understand about the 2025 open enrollment period.

1. Unsubsidized premiums are rising slightly, but most enrollees won’t shoulder the cost. Benchmark silver plan premiums, which are used for subsidy calculations, are projected to increase by 4% on average, while the lowest-cost bronze premiums are expected to rise by 5%. The steepest increases can be seen in Vermont, Alaska, and North Dakota, where unsubsidized monthly costs have surged by 10% or more. Conversely, premiums for low-cost plans are declining in 9 states, with significant reductions in Louisiana. (You can check state-specific data here.) A Peterson-KFF Health System Tracker analysis indicates that increasing hospital expenses and the greater use of GLP-1 medications are key drivers of higher premiums. On a national scale, a benchmark silver premium for a 40-year-old is estimated to be $497 monthly without subsidy assistance. However, the bulk of Marketplace shoppers (92%) qualify for subsidies, and with the enhanced subsidy options, many can secure plans with premiums under $10 per month. Since these subsidies cap monthly payments based on a percentage of an enrollee’s income, the vast majority will not face increased premium costs.
2. This may be the final year of enhanced subsidies. The enhanced subsidies established under the Inflation Reduction Act (IRA) are set to expire at the conclusion of 2025. Initially introduced in the American Rescue Plan, these subsidies enhanced premium support for existing enrollees and broadened eligibility for individuals earning above 400% of the poverty line. While these subsidies, which have significantly contributed to high enrollment numbers, will be available throughout 2025, they require Congressional action for any extension into 2026 and beyond. Without the enhanced subsidies, original ACA subsidies will persist, but net premium payments are anticipated to double or more in multiple states come 2026.
3. Marketplace shoppers will experience increased insurer options. On average, there will be 9.6 insurers participating in the ACA Marketplaces across states, the highest number recorded in any year to date (state data available here). In 2025, 97% of Healthcare.gov enrollees will have access to three or more ACA insurers, up from 78% in 2021. Several insurers, such as UnitedHealth Group, are venturing into new states in 2025, expanding into 4 new states and 119 additional counties across 13 of the 26 states where they currently participate. Centene (Ambetter) is also expanding its reach into 60 new counties across 10 states. With continual record-high sign-ups and strong financial performance from participating insurers, the ACA Marketplaces are becoming an increasingly appealing market compared to the low participation seen in 2018 (lowest point).
4. Open enrollment runs from November 1, 2024, to January 15, 2025, in most states. In line with new federal regulations promoting standardized open enrollment periods, the 2025 season will commence on November 1, 2024, throughout most states, with the exception of Idaho, which began its period on October 15. Open enrollment will conclude on January 15, 2025, in most states, apart from Idaho (December 16, 2024), Massachusetts (January 23), California, New Jersey, New York, Rhode Island, and DC (all January 31).
5. More states are shifting to State-Based Marketplaces. Georgia is set to transition to a State-Based Marketplace for the 2025 plan year, raising the total state-based marketplaces to 20. Illinois is scheduled to move to a state-based marketplace for the 2026 plan year and will cease using the federal platform in November 2025. Until then, residents of Illinois should continue utilizing Healthcare.gov.
6. The federal government is implementing new anti-fraud measures. The federal government has received numerous reports from consumers who have fallen victim to fraud, where insurance brokers signed them up or altered their plans without consent. To combat this issue, the federal government has undertaken enforcement actions against fraudulent brokers (including suspending certain brokers) and has applied Healthcare.gov standards to web brokers and direct enrollment entities in State-Based Marketplaces.
7. Modifications to short-term insurance plans are now in effect. The Biden Administration is reversing the Trump Administration’s expansion of short-term health insurance plans that do not comply with ACA standards and can discriminate against individuals with pre-existing conditions. The new regulations restrict short-term plans to a maximum of 4 months in total, and require that all online and written marketing materials have a consumer notice declaring that the coverage “is NOT comprehensive health coverage.” Although these short-term plans are not available on the ACA Marketplaces, many customers have reported feeling misled into thinking they were purchasing comprehensive insurance. A similar notice must also be included for fixed indemnity policies sold off Marketplace. These policies provide fixed payments in the event of illness or hospitalization, but, like short-term plans, they do not meet most ACA consumer protection standards. Written and online content must indicate that this fixed indemnity coverage “is NOT health insurance.” A recent lawsuit aims to challenge the new notice requirements for fixed indemnity plans, but for the time being, compliance is mandatory.
8. Special enrollment opportunities are undergoing changes. HealthCare.gov enrollees with incomes at or below 150% of the federal poverty line will continue to enjoy year-round special enrollment options, though this remains voluntary for state-based marketplaces. However, the “Medicaid Unwinding” special enrollment window will close on November 30, 2024. Additionally, starting in 2025, all consumers who select an ACA Marketplace plan during a special enrollment period (available in both federal and state-based marketplaces) will have their coverage effective from the first day of the month following their selection. Previously, in some state-based marketplaces, coverage initiation for plans selected after the month’s 15th day was delayed until the first day of the second month.
9. DACA recipients will be eligible for subsidized Marketplace coverage in 2025. A newly finalized rule by the Biden-Harris administration broadens eligibility for DACA recipients by redefining who is considered “lawfully present.” Starting November 1, 2024, DACA recipients will be able to enroll for coverage through either the Marketplace or the Basic Health Program. They will qualify for premium tax credits and cost-sharing reductions, even if their income is under 100% of FPL. A special enrollment period lasting 60 days will commence on November 1, 2024, allowing newly eligible DACA individuals to enroll. If they enroll in November 2024, their new Marketplace coverage could take effect as early as December 1, 2024. Despite ongoing litigation, DACA recipients remain eligible to enroll.
10. Network adequacy regulations must be met. Beginning in 2025, federal Marketplace plans will be obligated to comply with maximum appointment wait-time standards (e.g., no longer than a 10-business day wait for a behavioral health appointment, a maximum of 15 business days for routine primary care appointments, and 30 business days for non-urgent specialty care). Plans are expected to undergo a “secret shopper” survey from 2025 onwards to determine if in-network providers fulfill these appointment wait times for new patients seeking primary and behavioral health care.

On average, Americans allocate over $1,000 annually per person for prescription medications, significantly exceeding spending in other comparable countries. A 2023 KFF survey indicates that 30% of adults on prescription drugs have not adhered to their prescribed medication due to financial constraints. Additionally, a 2023 KFF consumer survey revealed that nearly one-quarter (23%) of insured adults have faced issues with their health insurance not covering a prescribed medication or imposing very high copays, a figure that rises to over one-third (35%) among those in fair or poor physical health. Individuals requiring specialty or brand-name medications for chronic conditions such as diabetes, cancer, arthritis, and HIV are particularly at risk for high costs, especially amidst increasing deductibles over the years. Moreover, insurance plans are more inclined to utilize coinsurance (a percentage of the medication cost after meeting the deductible) rather than copayments (a fixed dollar amount) for expensive specialty drugs, which can lead to higher out-of-pocket expenses for enrollees.

As biologics and specialty drugs have become more accessible, many individuals relying on these costly medications receive financial aid from drug manufacturers to mitigate out-of-pocket expenses. For those with private insurance, this support can be quite beneficial when applied toward deductibles and out-of-pocket expenses; however, an increasing number of plans have instituted “copay adjustment programs” that exclude these contributions from counting toward enrollees’ out-of-pocket limits. This issue brief summarizes copay adjustment programs, presenting arguments for and against their implementation, their commonality, and ongoing federal and state initiatives to tackle these issues.

Key Takeaways

• A number of drug manufacturers distribute copay coupons for their high-cost medications (often specialty drugs) to promote their usage and reduce consumers’ out-of-pocket expenses. In response to concerns over these coupons affecting their benefit structures and escalating costs, some health plans have modified the way these coupons apply to enrollees’ out-of-pocket responsibilities, potentially placing patients in a challenging position.
• Copay accumulators allow the value of the manufacturer’s copay coupon to apply with each prescription fill; however, this value does not contribute toward the enrollee’s deductible or out-of-pocket maximum. Once the coupon is depleted, the enrollee becomes liable for meeting their deductible before any copayment and/or coinsurance applies, which can be considerable for such medications.
• The 2024 KFF Employer Health Benefits Survey indicated that nearly one in five (17%) large employer-sponsored health plans have implemented a copay accumulator program in their primary plan, with this figure rising to one-third (34%) among firms with 5,000 or more workers. Further analysis revealed that two-thirds (66%) of individual Marketplace plans sold in states lacking prohibitions against copay accumulator programs have embraced these mechanisms in 2024.
• With copay maximizers, insurers aim to capitalize on the savings from manufacturer coupons. Plans may re-categorize specific high-cost specialty medications to exempt them from the Affordable Care Act’s limits on patient cost-sharing. Consequently, copay coupons do not contribute toward the enrollee’s deductible or out-of-pocket maximum, and cost-sharing requirements are calibrated to align with the maximum coupon value, spread evenly throughout the year. Enrollees who opt into this program typically do not face immediate out-of-pocket costs, but those who opt out may incur significant obligations that do not contribute to their out-of-pocket limits.
• While comprehensive data on the prevalence of copay maximizers remains scarce, one study shows their usage has surged in recent years, with approximately half of commercially insured individuals exposed to such programs.
• Although federal regulations have not yet thoroughly addressed the implementation of copay adjustment programs, relevant legislation has been proposed, and 21 states plus Washington, DC have taken steps to mitigate this issue within state-regulated health plans.

An Overview of Manufacturer Copay Coupons

Numerous prescription drug manufacturers have launched copay assistance initiatives in the form of copay cards and coupons designed to alleviate immediate out-of-pocket expenses (deductibles, copays, and coinsurance) for brand-name, often specialty, prescription medications for insured individuals. Some branded drugs with available coupons also have generic alternatives. The structure of these copay coupons differs by manufacturer and medication. Some coupons cover a specific number of prescription refills or are valid for the entire duration a patient is prescribed the medication. Others impose a maximum annual value or a monthly cap or a combination of both. Some manufacturer copay programs may require a minor monthly contribution (such as $10) from patients towards the drug cost. Additionally, copay coupons can be allocated to patient deductibles and coinsurance payments.

Eligibility for these programs may depend on whether the patient’s health insurance includes a copay adjustment program (as discussed in the following section). Copay assistance programs are distinct from patient assistance programs (PAPs), which typically provide financial support to those who are uninsured or underinsured but meet certain income criteria. They are also different from drug discount cards available to any consumer that can offer discounts on medications from pharmacies.

Copay assistance is accessible for the vast majority of brand-name drugs, and this percentage has increased over time. In 2023, it was estimated that copay assistance was utilized for 19% of prescriptions for privately insured patients (notably higher in some therapy areas), totaling approximately $23 billion in value. Nearly one-third of brand commercial prescriptions in the top 10 therapy categories made use of manufacturer copay assistance that year.

The federal anti-kickback statute prohibits the offering of copay coupons for beneficiaries of federal healthcare programs, including Medicare and Medicaid, as these coupons may incentivize beneficiaries to select more costly drugs over cheaper equivalents, potentially leading to increased federal expenditure. Manufacturers often implement safeguards to comply with this regulation, including printed notices on coupons and verifications during the claims process. However, a 2014 study by the Office of the Inspector General of the Department of Health and Human Services indicated that these safeguards may not stop all copay coupons from being used for Medicare Part D drugs, largely due to the lack of transparency in the pharmacy claims process related to coupon usage.

In contrast, federal regulations applicable to private insurance, such as the Affordable Care Act (ACA), do not specifically address copay coupons. However, the ACA does establish annual limits on out-of-pocket cost-sharing for essential health benefits (EHBs), including prescription drugs, for consumers with private health insurance (see callout box). Two states (MA (until 2026) and CA)) have banned the usage of copay coupons in their private insurance markets if a generic equivalent exists, subject to certain exceptions.

How Do Manufacturer Copay Coupons Operate?

To illustrate how manufacturer copay coupons function in real-world scenarios, consider this hypothetical example featuring a patient with cystic fibrosis who requires a brand-name specialty medication priced at $2,000/month, with and without the utilization of a copay coupon (Refer to Table 1). Assume the patient has the following:

• $2,000 deductible that remains unmet,
• 25% coinsurance (equivalent to $500),
• $5,000 out-of-pocket (OOP) maximum, and
• A $6,000/year manufacturer copay coupon applied.

Without a copay coupon: The patient covers the complete medication cost in January, fulfilling her deductible. The insurance plan begins to cover the medication in February, at which point the patient pays her coinsurance. By July, she hits her OOP maximum ($5,000), and from then on, the plan fully covers her cystic fibrosis medication (as well as all other in-network covered services and medications) for the rest of the plan year.

With a copay coupon: The copay coupon is deducted from her deductible and coinsurance each month. In this case, her $5,000 OOP maximum is reached in July, meaning that although the coupon was valued at $6,000, the manufacturer contributes $1,000 less. Her health plan will subsequently cover the medication in full for the remainder of the year, meaning the patient incurs $0 costs for this medication throughout the plan year. The health plan receives no advantage from the copay coupon.

In both scenarios, the patient achieves her deductible and OOP maximum within the same month. The total out-of-pocket expenses remain identical in both cases; however, without a coupon, those expenses are shifted from the patient to the drug manufacturer.

Though the Affordable Care Act (ACA) was enacted over 14 years ago, there remains a significant lack of awareness regarding the requirement that federal law mandates plans to cover the full cost of recommended preventive health care services, particularly contraception.

According to the ACA, most private health plans and Medicaid expansion programs are obligated to provide coverage without cost-sharing for many recommended preventive services that are crucial for women, including contraceptives, mammograms, and annual check-ups. After a decade filled with intense debates about the ACA’s future, a significant bipartisan majority now holds a positive view of this ACA provision. Nonetheless, several legal challenges have emerged against parts or the entirety of the ACA, including an ongoing case, Braidwood Management Inc. v. Becerra, aimed at nullifying the coverage requirement for specific preventive services. While a substantial proportion of women aged 18 to 64 (71%) recognize that the ACA mandates preventive services cover women’s annual check-ups without cost-sharing, nearly three in ten (29%) women either do not know or believe otherwise. Awareness of this benefit is notably lower among women aged 18 to 25 compared to those aged 50 to 64 (52% vs. 77%). Additionally, knowledge of the obligation to cover routine mammograms is high (73%) among women over 40, but one in four (26%) remain unaware (Figure 1).

Despite the majority of women using contraceptives and the requirement for plans to cover all FDA-approved prescription methods, fewer than half of reproductive-age women (43%) and contraceptive users (47%) are aware that their insurance should fully cover these costs. A higher proportion of Black women are informed about this requirement compared to White women (49% vs. 42%). Alarmingly, less than half (44%) of women with private insurance, to whom this requirement pertains, know that most plans are mandated to cover the full cost of birth control for women (Figure 2).

Some women who are unaware of the contraceptive coverage requirement may have inadvertently incurred out-of-pocket expenses for their contraception. Multiple reports have documented individuals still paying out-of-pocket for contraception, while recent Congressional investigations indicated that some health insurers continue to impose charges for contraception that should be fully covered. In response, the federal government has been issuing guidance to clarify and reinforce the health plans’ obligations.

At present, all ACA preventive service mandates remain effective, though their future hangs in the balance amid ongoing legal challenges. The prevailing lack of awareness concerning this benefit may lead to fewer women accessing recommended preventive care.

The open enrollment period for 2025 ACA (Affordable Care Act)-compliant health insurance is approaching. Let’s explore the significant changes that consumers should note this fall.

For the first time, DACA recipients are anticipated to be eligible to access the Marketplace and qualify for income-driven subsidies, under the same criteria as other applicants. This shift is expected to bring an additional 100,000 enrollees into coverage for 2025.

Nevertheless, attorneys general from 19 states have initiated a lawsuit in a federal district court, aiming to delay and overturn the DACA eligibility rule. Oral arguments are slated for mid-October, and there is a chance that a ruling will be issued just before the commencement of open enrollment. ^{Thus, uncertainty remains regarding DACA recipients’ ability to enroll in Marketplace coverage for 2025.}

This fall, Georgia will operate its own Marketplace platform. Beginning November 1, residents will use Georgia Access – or an approved enhanced direct enrollment entity ^{– for enrolling in or renewing their 2025 coverage. Since 2014, Georgia residents have relied on HealthCare.gov for enrollment, but this option will no longer be available for 2025 and future years.}

Alongside the ACA’s federal premium subsidies and cost-sharing reductions, various states provide additional state-funded subsidies that further reduce premiums, out-of-pocket costs, or both.

For 2025, some alterations to these subsidies include:

• California: A program that launched in 2024 eliminated deductibles and other out-of-pocket costs for applicants with household incomes up to 250% of the federal poverty level (FPL). ^{For 2025, this program is expanding. All Covered California applicants will qualify for plans with zero deductibles and reduced out-of-pocket costs.}
• New Mexico: State out-of-pocket assistance (SOPA) benefits will be expanded, allowing plans with a 90% actuarial value (akin to a Platinum plan) to be available for enrollees with household incomes up to 400% of FPL. ^{In 2024, the income threshold for these 90% actuarial value plans was capped at 300% of the federal poverty level.}
• Colorado: Previously available to enrollees with household incomes up to 250% of FPL, Colorado’s state-funded cost-sharing reductions will see the eligibility limit lowered to 200% of FPL in 2025. Consequently, fewer individuals will qualify; those with incomes between 200% and 250% FPL will be entitled to only the federal cost-sharing reduction, not the state-funded assistance.
• New York: Currently, state-funded Marketplace subsidies are unavailable, but New York has obtained federal authorization to introduce state-funded subsidies starting in 2025. ^{According to the approved waiver amendment, applicants with incomes up to 400% of FPL will qualify for new cost-sharing reductions, plus additional assistance for diabetes care and pregnancy/postpartum support.}

Some enrollees in Oregon may shift to the Basic Health Program

Oregon launched a Basic Health Program – Oregon Health Plan Bridge – in July 2024. Adults with incomes exceeding 138% but not surpassing 200% of FPL are eligible to enroll.

Check our overview of Basic Health Programs.

Marketplace enrollees within this income bracket had the option to transition to the Oregon Health Plan Bridge starting in July 2024, although participation was not mandatory.

When these enrollees update their application (including contact information, projected income, address, family size, or a plan switch during open enrollment), their eligibility for the Oregon Health Plan Bridge will be assessed at that time. Should they qualify for the bridge, they will forfeit eligibility for Marketplace subsidies.

Consequently, individuals who update their Oregon Marketplace account during open enrollment, indicating a projected income eligible for the Oregon Health Plan Bridge, will generally find this coverage to be the best choice for 2025, as they would otherwise incur full costs to maintain their private Marketplace plan.

If an enrollee allows their plan to auto-renew without any updates to the application, they might keep their Marketplace plan up to 2026 (instead of transitioning to the Oregon Health Plan Bridge); however, the state emphasizes that any changes, such as income fluctuations, necessitate updating the application.

Some rates have already been finalized in certain states, while others remain under review. Details for carriers in your state can be accessed by selecting your state on this map.

It’s crucial to note that average rate changes are determined based on full-price (unsubsidized) premiums, and most enrollees do not pay the full amount. As of early 2024, approximately 93% of Marketplace enrollees nationwide were benefiting from premium subsidies that alleviated some or all of their coverage costs.

For subsidy recipients, the net (after-subsidy) premium for 2025 will not only be influenced by changes to their own plan’s premium, but also by fluctuations in the benchmark (second-lowest-cost Silver) plan premium, as the benchmark plan’s cost is pivotal for determining premium subsidy amounts. Review notifications from your insurer and the Marketplace to comprehend how your net premium will shift upon renewing your current coverage.

At least 11 states will experience carrier additions and exits

Each year, transitions occur regarding which insurers participate in Marketplace coverage across several states. While in many areas the list of participating insurers remains unchanged for 2025 compared to 2024, some states will witness new insurers entering the Marketplace, whereas others will see insurers bowing out or ceasing operations in the individual market altogether.

For specifics on 2025 insurer participation and premium adjustments, we maintain individual pages for each state’s Marketplace; here’s a brief overview of carrier movements for 2025:

New Entries:

• UnitedHealthcare – entering Indiana
• HAP CareSource – entering Michigan
• WellSense – entering New Hampshire
• WellPoint – entering Texas, Florida, and Maryland
• Simply Healthcare Plans, Inc. – entering Florida

Exits:

• Celtic – exiting Indiana Marketplace (will continue to offer plans outside the Marketplace)
• Ascension (US Health & Life) – leaving Indiana, Kansas, Tennessee, and Texas
• Cigna – exiting Pennsylvania, ^{South Carolina, and Utah}
• Ambetter/Western Sky – leaving New Mexico
• PacificSource – exiting Washington
• Aetna Life – terminating in Virginia (but Aetna Health will keep offering plans)

If your current insurer is exiting your market at the close of 2024, you must choose a new plan for 2025. You’ll have until December 31 to select a new plan with a January 1 effective date. ^{Depending on your location, the Marketplace may likely automatically assign a replacement plan if you do not choose your own. However, being proactive in choosing your coverage is advisable.}

Changes in insurer participation in the Marketplace will not only influence available plan options but also potentially affect the benchmark plan premium – particularly if new or exiting insurers hold that designation. Variations in the benchmark plan premium will subsequently impact premium subsidy amounts for all in the area who are eligible for subsidies, as subsidy amounts are computed based on the benchmark plan’s cost.

As of September 1, 2024, consumers are now prohibited from purchasing short-term health insurance that lasts longer than four months, including renewals, and non-renewable plans are limited to a maximum duration of three months.

Between late 2018 and August 2024, federal regulations allowed the sale of short-term health policies with durations up to three years. For individuals relying on these longer-term short-term health plans, understanding available options during the 2025 open enrollment period is vital, along with the potential consequences of neglecting to select a new plan during this timeframe.

If your existing short-term policy is set to expire sometime in 2025, you will not be able to obtain another longer-duration short-term policy thereafter. All available options will be capped at a maximum of four months, which could leave you uninsured at some point in 2025. Furthermore, the termination of a short-term policy does not constitute a qualifying life event to trigger a special enrollment period for an individual/family health plan enrollment.

Therefore, if you are currently on a short-term policy that is ending in 2025, consider your Marketplace options during the forthcoming open enrollment period. Enrolling in a Marketplace plan will ensure coverage throughout 2025 and possibly qualify you for federal or state financial assistance with premiums.

Recently, CMS (the Centers for Medicare & Medicaid Services) has taken measures to prevent unauthorized enrollments and plan changes that occurred in states utilizing the federally run Marketplace (HealthCare.gov).

Since July, CMS has put new regulations into effect that prohibit brokers from adding themselves to a person’s HealthCare.gov account without the policyholder’s consent. ^{Previously, some brokers exploited this loophole, receiving commissions for those accounts and modifying plans without the enrollee’s awareness.}

If you wish to assign a different broker to your account, you must either participate in a three-way call with the Marketplace call center and your new broker or log into your HealthCare.gov account to input the new broker’s information. ^{(Here’s how to do that.) This process is necessary for anyone transitioning brokers or who decides to seek assistance after navigating the enrollment process independently.}

Call volume at the Marketplace significantly rises once open enrollment begins. If you know you’ll want to add a broker to your existing HealthCare.gov account or switch to a new broker, consider addressing this ahead of the open enrollment period.

If you reside in a state that operates its own Marketplace (meaning you don’t utilize HealthCare.gov), that Marketplace will have its own guidelines for adding a new broker to your account. The process differs between state-run Marketplaces, but your broker or the Marketplace can clarify the steps needed to accomplish this transfer.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has authored numerous opinions and educational articles about the Affordable Care Act for healthinsurance.org.

This year, family premiums for employer-sponsored health insurance increased by 7%, reaching an average of $25,572 per year, according to KFF’s 2024 benchmark Employer Health Survey. On average, employees contribute $6,296 annually towards family coverage costs.

This marks the second consecutive year of a 7% increase in premiums. Over the past five years, during a period characterized by significant inflation (23%) and wage growth (28%), cumulative premium growth has also been substantial (24%).

While the total premiums for family coverage continue to rise, the average amount workers pay towards their annual premiums has remained relatively stable over the past five years, increasing by less than $300 since 2019, which translates to a total rise of just 5%. This stability may reflect the pressures of a tight labor market.

For workers with an annual deductible for single coverage, the average this year is $1,787, which is comparable to last year’s $1,735 and shows a modest increase of 8% since 2019, when the average stood at $1,655.

Workers at small firms (with fewer than 200 employees) typically face higher deductibles than those at larger firms ($2,575 compared to $1,538). Among all covered employees, around one-third (32%) of those at smaller firms have an average single deductible of at least $3,000.

“Employers are spending an amount equivalent to purchasing an economy car for each worker every year for family coverage,” said KFF President and CEO Drew Altman. “In recent years, the tight labor market has made it difficult for them to pass on costs to workers who are already facing high healthcare expenses.”

Approximately 154 million non-elderly Americans depend on employer-sponsored health coverage, and the 26th annual survey, which included over 2,100 large and small employers, offers a comprehensive view of the trends influencing it. Alongside the full report and summary of findings released today, an article featuring selective findings will be published in Health Affairs, appearing in its November issue.

The survey reveals that many of the nation’s largest employers (with at least 5,000 employees) are implementing measures to protect lower-wage employees from the effects of escalating healthcare costs. Among these large firms, 29% report having a program to lower premiums for lower-wage employees, while 19% provide a reduced-benefit plan with more affordable coverage.

Employer Coverage of GLP-1 Drugs for Weight Loss is Limited and Restricted

In light of the rising interest in expensive GLP-1 medications such as Wegovy for weight loss, this year’s survey examines the prevalence of such coverage in employer plans.

Fewer than one in five large employers with at least 200 employees offering health benefits (18%) report that they cover GLP-1 drugs for weight loss, while half (52%) state they do not provide coverage, and the remaining 31% are uncertain. Among the largest companies with at least 5,000 employees, more than a quarter (28%) cover GLP-1 drugs, and nearly two-thirds (64%) do not.

Among large companies that offer these medications, about half (53%) impose conditions or requirements for coverage. These requirements might include prerequisites like a consultation with a dietician, psychologist, or other professional (24%); requiring participation in a lifestyle or weight-loss program either before (8%) or during (10%) treatment; or other types of conditions (26%).

Providing coverage for these weight-loss medications carries significant cost implications for employers, as a previous KFF analysis estimated that nearly 50 million adults with employer health plans meet the clinical criteria for these treatments, which can incur thousands of dollars annually per individual.

Among large employers covering GLP-1 drugs for weight loss, one-third (33%) indicated that this coverage will have a “significant impact” on their plan’s prescription drug expenditures. Additionally, nearly half (44%) of all large firms believe that covering GLP-1 drugs will be “very important” or “important” for employee satisfaction with their health plan.

Among large companies that do not currently cover GLP-1 drugs for weight loss, only 3% say they are “very likely” to start doing so in the next year, while 23% indicate they are somewhat likely to do so.

“Employers are challenged by the need to integrate these potentially valuable treatments into their already expensive benefit plans,” stated KFF Vice President and study author Gary Claxton.

Other notable findings include:

• IVF and other family-building benefits. About 27% of large employers with at least 200 workers report covering in-vitro fertilization (IVF), with a similar percentage (26%) covering artificial insemination. A larger percentage (37%) cover fertility medications, while fewer (12%) cover egg or sperm freezing. Approximately one-third of employers are uncertain about whether their plans cover these services.
• Rebates from pharmacy benefit managers (PBMs). PBMs manage prescription drug benefits for payers, including employers, and often negotiate rebates with drug manufacturers for favorable formulary positioning. Among the largest firms with at least 5,000 employees, 34% claim they receive “most” of the rebates negotiated by their PBM or health plan, while another 34% receive “some,” and 8% report receiving “very little.” The remainder are unsure about their rebate amounts.
• Abortion. Among large employers with at least 200 workers, 8% report that their plan does not cover legally provided abortions under any circumstances. Additionally, 18% say they only cover such abortions under limited conditions such as rape, incest, or threats to the life or health of the pregnant individual. Most (45%) of other large employers are unsure about the extent of their abortion coverage. These figures have remained stable since 2023.
• Mental health and substance abuse. Approximately 25% of employers offering benefits say their plan’s network for mental health and substance abuse services is “somewhat” or “very” limited, compared to 10% who report the same for their general networks. About half (48%) of large firms with at least 200 employees have enhanced the mental health counseling resources available to their employees through employee assistance programs or third-party vendors like Headspace or Lyra Health.
• Spousal coverage and incentives for not enrolling. Among large firms with at least 200 employees that provide health benefits to spouses, 24% either charge higher premiums or place restrictions on coverage when spouses have health insurance from another source. Additionally, 12% of large firms offering benefits incentivize employees to enroll in a spouse’s plan, and 13% provide additional compensation or benefits to those who opt out of the company’s health plans.

KFF Headquarters: 185 Berry St., Suite 2000, San Francisco, CA 94107 | Phone: 650-854-9400
Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone: 202-347-5270

Visit us at www.kff.org | Email Alerts: kff.org/email | Follow us on Facebook: facebook.com/KFF | Twitter: twitter.com/kff

KFF serves as the independent source for health policy research, polling, and news. We are a nonprofit organization headquartered in San Francisco, California.

An updated collection of charts examines the anticipated growth in health spending over the next few years, focusing on trends in prescription drug costs, out-of-pocket expenses, and other related factors.

In 2024, the growth in per capita health spending is projected to slow down to 4.5%. Expectations indicate a further decline in growth rates for 2025 and 2026, anticipated at 4.2% and 4.3%, respectively. From 2027 to 2032, average annual growth in per capita spending is expected to stabilize at around 5.0%. Throughout this timeframe, national health expenditures are likely to exceed GDP growth, primarily due to rising medical prices.

The insights presented in this chart collection utilize the 2022 National Health Expenditure (NHE) projections provided by federal actuaries. For more analyses and information, visit the Peterson-KFF Health System Tracker, a resource hub focused on monitoring and evaluating the U.S. health system’s performance.