Key Insights from the Annual Business Group on Health Conference

More than 700 health benefit leaders gathered at the 2025 Business Group on Health conference to exchange ideas, discuss emerging trends and explore innovative solutions in health care benefits. Below are emerging themes and ideas from the event on how to address the rising cost of benefits and deliver valuable benefits to employees:

General Observations:

• Holistic Approach Needed: A central theme was the importance of breaking down benefit silos. Employers must consider benefits holistically to ensure that as they make changes in one area, it is not inadvertently driving costs in another. It’s a subtle shift, but it involves changing the mindset to put employees at the center of the benefits ecosystem and minimizing the challenges they face navigating multiple systems. Many employers are shifting focus toward best-in-class solutions rather than relying solely on single vendors to create holistic solutions.
• Pharmacy Costs & Fiduciary Responsibility: According to the Business Group on Health 2025 survey, pharmacy now accounts for approximately 27% of total benefit spend, leading to more discussions about fiduciary responsibilities, specifically prescription costs and the need for better pharmacy management. Lack of transparency, cost and legislation prompted several concerns regarding dispensing fees.
• Vendor Awareness & Transparency: Employers must demand greater transparency from Pharmacy Benefit Managers (PBMs), especially regarding dispensing fees, specialty drugs and rebates. They must also push PBMs to act as partners, allowing them to separate services versus an all-in bundled approach.
• Tariffs & Cost Impact: Tariffs are projected to increase overall supply chain costs by 2-6% for health care providers. Generic drugs will be disproportionally impacted because the majority are manufactured outside the U.S., impacting members and plan sponsors.

Policy and Legislative Trends:

• Health Care Policy Uncertainty: With over 100 state and federal bills proposed, there’s growing frustration with legislators’ perceived lack of understanding of the implications to plan sponsors and members. There’s an opportunity for employers to engage more actively with lobbyists to convey real-world impacts. Historically, there has been a disconnect between employers’ lobbyist groups and benefit teams.
• Financial Pressures and Medicaid: Employers should closely monitor federal health care cuts, considering Medicaid constitutes $1 out of every $5 spent in health care, with many employees being dual-eligible today. Several members expressed concern over rural health care’s sustainability.
• Cost Management: Rational discussions about health care costs and value are needed and are impossible without cost transparency. Hospitals remain primary cost drivers, particularly for oncology services, highlighting the necessity of state-level and employer interventions.
• Potential Tax Changes: Discussions regarding eliminating the deductibility of health care expenses could negatively impact employers’ bottom lines.

Managing Prescription Benefit Expense:

• Complexity and Cost Management: The complexity of pharmacy benefit spending demands careful attention in PBM evaluations. Employers increasingly seek transparency, incentives alignment, services flexibility and detailed data-sharing from PBMs.
• Strategic RFPs: Effective RFPs must move beyond evaluating unit costs and rebates to also consider drug mix, PBM behavior, technology investment, financial alignment and the capacity to unbundle specific services (innovation, specialty pharmacy, 340B).
• Emergence of Alternative PBMs: Employers are increasingly open to exploring PBMs beyond the “big three,” prioritizing flexibility, transparency and alignment of financial incentives. Midmarket PBMs are reporting a significant increase in the number of RFPs they receive, up to double prior years.
• Contracting: PBM contracting is critical to ensure employers receive the results proposed in the RFP. Many employers are looking toward consultants to ensure that the language supports the financial and customer service outlined within the RFP.

Bold Moves and Innovation:

• Leadership Engagement: Making bold decisions can be challenging due to organizational inertia, but the benefits of integrated solutions and breaking silos are clear. Integration helps employees navigate health care easily and maximizes the value of benefit offerings.
• Decision-making and Tools: Employers emphasized the need for data-driven decision-making, robust analytics and regular business reviews that focus on clearly defining problems rather than solely reporting data.
• Benefit Concierge Services: More employers are investing in concierge-style services to assist members in navigating complex health care systems and choosing appropriate benefit options.
• Regular Market Innovation Updates: Employers are staying more informed about market innovations through regular forums, reverse RFPs and requests that vendors clearly articulate the problems they solve and how they are different.

Looking Ahead

Employers are navigating an increasingly complex health care landscape, balancing cost control, transparency demands, policy uncertainties and employee satisfaction. Addressing pharmacy costs strategically, engaging proactively in policy discussions and leveraging best-in-class integrated solutions will be essential to achieving sustainable, employee-centered health care benefits. The 2025 conference underscored the importance of employers remaining proactive, strategic and deeply engaged to ensure high-value health care solutions for their employees.