Weight Loss Drugs
2025 continues to show a rapidly increasing demand for weight loss drugs, known as GLP-1 inhibitors, which originally were created to treat patients with type 2 diabetes, but also have the added benefit of weight loss. 2024 saw the addition of these drugs being suggested as an aid in addressing Sleep Apnea which may only lead to greater demand. Drugs like Ozempic and Mounjaro typically treat type 2 diabetes and can be covered by insurance carriers (usually with prior authorization required by carrier, medical history provided by doctors, etc.), while Wegovy and Zepbound are for weight loss only and typically NOT covered by insurance carriers. These drugs are expensive (ranging around $1,000/month) and they are one of the big reasons Rx drug inflation (i.e., trend) is at an all-time high – anywhere from 10-15% depending on the source. Insurance carriers will continue to monitor market changes and medication utilization, and their management strategies will be adjusted to balance both members’ needs and employers’ costs.
RxDC (Prescription Drug Data Collection)
This annual reporting is a federal requirement under the Consolidated Appropriations Act or CAA, which was passed in 2021. This is a requirement for health plans and insurers to submit data on prescription drug costs and healthcare spending to the Centers for Medicare and Medicaid Services (CMS). If you have a fully insured plan with your insurance carrier, they will be responsible for submitting the data on your behalf, though they will need a few items related to employee and employer contributions that will come from you as the employer. Your carrier should have already notified you of this requirement and the due date to report this data to them. In the event you do not report the required information to your insurance carrier by the due date, a majority of the submission your carrier is doing on your behalf will become your responsibility.
If you have a self-funded or level-funded plan with your insurance carrier, you will be responsible for submitting the data for the RxDC reporting. This data is due to CMS by June 1st of each year for the prior year’s coverage period and is submitted electronically through the RxDC module on the Health Insurance Oversight System (HIOS) located on the CMS Enterprise Portal. Additional information on this reporting requirement can be found here: CMS RxDC Information. We hope you find this useful, but as always, please contact your Stumm Insurance Service Team if you need further assistance.
Section 125 – Cafeteria Plan Overview
Section 125 refers to the IRS Code Section 125, which allows employers to offer a cafeteria plan—a benefits plan that enables employees to pay for certain qualified expenses like health, dental & vision insurance premiums, flexible spending plans and HSA contributions on a pre-tax basis. There are employer compliance requirements when offering benefits on a pre-tax basis. An employer’s third-party administrator (TPA) may assist or provide guidance on the compliance requirements and duties. We invite you to review this link for an overview: Section-125-Cafeteria-Plans-Overview. Please reach out to your Stumm service team for additional information.
Healthcare Costs in 2025
Health care costs are expected to continue to rise during 2025 due to several factors. Some, but not all, of those factors are:
- GLP-1 Medications: These high-cost drugs for diabetes and weight loss, which can run around $1,000/month, are becoming more popular. By 2030, up to 9% of the U.S. population could be using them.
- Pharmacy Spending: Prices for common drugs are increasing (4%-10%), and advanced treatments like cell and gene therapies can cost millions. Biologic drugs, which treat complex conditions, continue to drive high costs.
- Labor Costs: A shortage of health care workers, especially with an aging population, is pushing up wages and overall health care costs.
- Chronic Conditions: Diseases like heart disease, diabetes, and obesity make up a large portion of health care spending, with their prevalence continuing to rise.
- Aging Population: As more people age, health care costs increase, as older adults require more care, often due to chronic conditions.
Employer Takeaway: Stumm has seen a higher pattern of renewal increases during Q1 2025. Employers should prepare for possible higher renewal action than previous years.
Please note that Stumm Insurance, LLC is “closed” on certain Holidays throughout the year. Your Stumm Service team will not be readily available on these dates in the upcoming quarter:
- 05/26/2025 Memorial Day
- 07/04/2025 Independence Day
Should you have any questions or would like to discuss these or any other topics, please feel free to contact your Stumm Insurance Service Team.