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Organizations should expect lots of changes in 2025. This shouldn’t be a surprise. 

While we don’t know exactly what the future holds, I’ve published a couple of articles recently about the types of changes that organizations might expect from a legal and compliance perspective and some strategies for managing change. What’s interesting to me is to see the topics that continue to come up in these conversations. 

One topic we haven’t discussed is employee benefits. So I asked our friends at HUB International if they wanted to share their insights and they said yes. Cory Jorbin, Esquire, is the chief compliance officer for HUB International’s West Region Employee Benefits team. In his role, Cory consults with employers of all sizes to design, implement and ensure the compliance of employee benefit plans. He holds a a Juris Doctorate from Cleveland State University, is a licensed attorney in the State of Illinois, and is admitted to practice before the U.S. Tax Court.

Cory has spoken to us before about Individual Coverage Health Reimbusement Arrangements and the Affordable Care Act. Please remember that Cory’s comments shouldn’t be construed as legal advice or as pertaining to any specific factual situations. If you have detailed employee benefit questions, they should be addressed directly with your friendly neighborhood labor and employment attorney or benefits broker.Cory, thanks for joining us. Before we start talking about 2025, let’s talk about 2024. What’s one thing that organizations have ignored (or put on hold) that they need to refocus on next year?

[Jorbin] From an employee benefits compliance perspective, employers should refocus on meeting their fiduciary obligations for their health and welfare plans. For nearly 20 years, we have seen fiduciary litigation against employer sponsored retiree plans, with comparably few lawsuits against health and welfare plans. In 2024, we saw two major lawsuits against Johnson & Johnson and Wells Fargo related to their health plans. These lawsuits have reminded employers that fiduciary duties apply to health and welfare plans too, and not just retirement plans.

In 2025, employers have an opportunity to understand what these fiduciary duties mean, and more importantly, take steps to ensure they are meeting those obligations. 

Employers also generally have an opportunity to be more strategic rather than reactionary, not just with their benefits, but generally as well. We live in an age of instant gratification, and while sometimes that can be nice, it can also lead to reactionary decisions rather than a well thought out strategic plan. In other words, slow and steady wins the race.

Speaking of being strategic, let’s move on to 2025. From your perspective, do you see a theme or trend for what organizations can expect in general or specifically to employee benefits? 

[Jorbin] With the coming change in administrations, the main theme employers are expecting is change. However, while some change is guaranteed, the specifics are currently unknown and it may take some time for changes to impact employers. This lack of knowing what changes are coming, is leading some employers to be anxious about these changes. 

One area I think both individuals and organizations are anxious to know more about is technology, specifically artificial intelligence (AI). Do you see AI playing a prominent role in 2025? Why or why not? 

[Jorbin] AI is here to stay and it will continue to play a prominent role in 2025. We are seeing new, innovative tools and resources using AI, as well as existing tools and resources starting to incorporate AI into their products. 

Employers are using AI today, even if they don’t know the specifics of how AI is being used, or what the AI does. At the same time, we are seeing more regulations related to AI, as well as employers developing AI policies. HR teams are going to have to get up to speed on how their organizations are using AI today, as well as how their existing tools are using AI. 

You mentioned regulations. Is there an area or two of compliance that organizations need to focus on? 

[Jorbin] As I already mentioned, fiduciary compliance for health and welfare plans is a major area to focus on. This is also an area unlikely to see change related to the change in administrations. The Johnson & Johnson and Wells Fargo cases are just the tip of the iceberg when it comes to fiduciary litigation related to health and welfare plans. I think of them as test cases. The plaintiff’s attorneys have done this before (and continue to do it) with retirement plans, and they are going down this same path with health and welfare plans. They are seeing what works and what doesn’t and learning from their mistakes. If this is a winning strategy financially, they will continue to pursue these types of cases. 

The timing for these cases is also ripe given their focus on prescription drug costs. The country is tired of paying exorbitant prices for prescription drugs, and these cases focus on the prices plans are paying for prescription drugs. We have a rotating wheel of blame when it comes to responsibility for our high healthcare costs. Right now that wheel has landed on prescription drugs, and in particular the pharmacy benefits managers or PBM’s.

Employers should use this as an opportunity to review their plans and consider requests for proposals (RFP) or at least requests for information (RFI) related to their third party administrators (TPAs), PBMs, and other service providers. While nothing can prevent a lawsuit like Johnson & Johnson, solid processes and documentation of those processes can help protect employers. 

Another big focus for many employers will be on Form I-9 employment verifications. During the 2024 presidential campaign, immigration was a hot topic. Since the election, it has remained a hot topic and will be a priority for the new administration. For employers, this means making sure their Form I-9s and other employment verification documentation is properly completed. 

While many organizations have already put their operational plans and budgets in place, sometimes, organizations revisit their strategies and goals based on what’s happening in the business environment. Is there something that you would suggest organizations add to their process, so they stay current? 

[Jorbin] It would definitely be helpful for organizations to include this as part of their planning and budgeting process. At the very least, this forces the employer to look ahead into the future and determine what they expect, why they expect it, and how the expectations shape the future of the organization. Of course not every future prediction will come true, but this is a valuable exercise. 

Quick follow-up: Is there anything that organizations can do to monitor how “good” their outlook forecast was? 

[Jorbin] Quantitative predictions are easily measured, but qualitative much less so. That being said, organizations should absolutely monitor their forecasts. One potential way to do this is to take a mid-year inventory of their forecasts and see how they are trending. Some forecasts may trend towards being accurate, while others less so. This also presents an opportunity to revise forecasts.

Finally, at the end of the year these forecasts should again be analyzed. What forecasts were accurate, and which were not? Why were some forecasts accurate and others not? Were there any key misses? 

Last question and I’m shifting from organizations to individuals. Given our conversation about the outlook for 2025, what are a couple of things that HR professionals should consider when they’re setting goals for their department?

[Jorbin] When setting goals for 2025, I see two opportunities for HR professionals…leadership development and talent retention.

Our population as a whole is aging, with the youngest baby boomers turning 60 in 2024. Many baby boomers are already retired, and many more will be retiring in coming years. As a result, this could leave many organizations with a shortage of leadership and experienced talent. Leadership doesn’t just mean at the C-Suite level, but also includes middle and lower level managers too. HR should use this as an opportunity to identify talent to move into those leadership roles as current employees retire. Organizations could find they have gaps in certain departments with no readily available ‘number two’ ready to become ‘number one’. Likewise, they need to think beyond just their organizations because while they may have a ‘number two’ ready to become ‘number one’ their competitor may not, which means their competitor may look to poach their talent. 

This should also include evaluating the current population and identify those with interest in and potential to move up. Moving up also looks different for different employees, and employers should recognize that leadership development is not a one size fits all approach. 

Leadership development aligns with talent retention, which employers should also focus on. We don’t want to develop our key talent only to see them leave for potentially greener pastures elsewhere. We want a return-on-investment (ROI) on our leadership development efforts, which means retaining talent. 

While the unemployment rate has crept up in recent months, it is still lower than the average over the last twenty years. Some of the higher profile layoffs we have heard companies doing may be due to employers ‘rightsizing’ their teams after Covid-era hiring sprees. Other employers are simply cutting back on hiring, or choosing not to backfill certain open positions. This highlights the importance of employers keeping the existing talent they have. 

I want to thank Cory for sharing his insights with us. There’s a lot of relevant employee benefits information here for organizations to think about as they are starting the year – as well as throughout the year. If you would like to learn more, be sure to check out HUB International’s 2025 North American Outlook. 

Organizations and HR departments need to expect changes in the upcoming months. As Cory mentioned, it might be easy to find a fast solutions. But those fast solutions might not be the best in the long-term. And by “best”, I mean in terms of the workforce and profitability. 

The post Employee Benefits: What to Expect in 2025 appeared first on hr bartender.
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14/01/2025 – 12:03 /Sharlyn Lauby
Twitter: @hoffeldtcom