Kansas City, USA: With U.S. healthcare costs expected to grow between six and eight percent again this year, plan sponsors chose “cost reduction” as their top priority when considering employee benefits program changes in the results of the 2025 Lockton National Benefits Survey.

This year’s results mark the first time since the annual survey’s first year in 2019 that cost reduction overtook attracting and retaining talent as the highest priority for employers. The number of respondents choosing cost reduction as the top priority has now grown 18% between 2022 and 2025, while attracting and retaining talent has fallen by 14% since 2023.
 

“The fact that cost reduction is now the top priority for employers shows us the impact that rising healthcare costs are already having and are expected to continue to have on benefit expenses for employers of all sizes and types,” said Shannon Demaree, Executive Vice President, People Solutions Practice Leader at Lockton. “We believe plan sponsors should take a closer look at the cost reduction options available to them and how to implement them effectively.”

Even with the increased focus on cost control and containment, plan sponsors remain cautious about making changes to employee benefits programs. Only nine percent of survey respondents consider their organizations to be “trailblazers” when it comes to adjusting employee benefits plans, with a further 31% classifying themselves as “fast followers.” The majority of respondents, 53%, prefer to wait until a tactic has been used effectively by other companies in the market before implementing it in their organization.

“Plan sponsors are recognizing the need to optimize their benefits programs for the highest value at a lower cost, but we’re still seeing a hesitation to take decisive action, and especially on more progressive types of adjustments,” said Chris Bartnik, Senior Vice President, People Solutions Growth and Innovation Leader at Lockton. “Employers don’t want to be perceived as prioritizing cost savings over member needs or not caring about meeting employee expectations. At the same time, delaying changes is likely to compound cost issues and make problems more difficult to solve down the road.”

The 2025 survey, which includes responses from 1,817 plan sponsors representing various ownership structures and group sizes across the U.S., also highlights the areas in which plan sponsors are currently making program adjustments.

The largest percentages of efforts are categorized as foundational tactics, which are likely to cause less disruption to plan members but also generate smaller amounts of savings. The top tactics being implemented by plan sponsors in these areas are the addition of advocacy and navigation services (46%), use of carrier narrow/high-performing networks (32%), engaging outside vendors to educate 65+ year-old employees on Medicare (26%) and engaging outside vendors to educate COBRA-eligible employees (21%).

Among self-funded respondents, the results show much lower adoption of tactics that would be considered more progressive, like excluding spouses with access to other coverage (9%). Adoption of “disruptive” tactics was even lower, with only 6% of plan sponsors offering reference-based pricing, and less than 1% excluding all spouses from coverage or offering individual coverage health reimbursement arrangements.

“We’d love to see more plan sponsors focus their cost reduction efforts in key areas like network solutions, eligibility management, pharmacy selection and the various different ways they can approach optimizing their plans,” said Bartnik. “The successful organizations will be those that use data to identify the highest-impact options in each of these areas and those that can firmly tie benefit changes into their core philosophies and values. To get behind any shift in benefit programs, employees and stakeholders must understand the reasons behind the changes.”

 
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