What CFOs Need To Know About Health Insurance

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For those following tax law, the news story of the holidays wasn’t Elon Musk feuding with the MAGA movement, or President Joe Biden commuting the sentences of almost all of the prisoners on federal death row. It was the drama over the Corporate Transparency Act. After reversals and appeals, the CTA—which would require companies to report information about who ultimately owns and controls them to the federal government—is right now on hold, pending a final ruling on a court case whether the law is unconstitutional.

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But there were some headspinning reversals in the weeks between the Christmas holiday and today. The requirement in the law for companies to file beneficial ownership information with the federal government, which had been put on hold by a federal judge at the beginning of December, was taken off hold on December 23 by the U.S. Fifth Circuit Court of Appeals. And then put back on hold on December 26 by the same court “in order to preserve the constitutional status quo” while the panel considers all of the arguments that had been presented in order to make its ruling.

Forbes’ Kelly Phillips Erb has been following all of the drama about the controversial law since it was passed by Congress in 2021. And she wrote about the latest wrinkle: The Justice Department asked the Supreme Court last week to get rid of all of the pauses on enforcing the law as the case works its way through the judicial system.

The Supreme Court has yet to respond, but it may not matter. The CTA became law as part of the National Defense Authorization Act for FY 2021, which had been vetoed by then-President Trump and saw a Congressional veto override in the waning days of his first term. Trump’s veto had more to do with issues he had with defense-related provisions, but he likely is not a fan of a law that forces more business regulation. Once he becomes president, Trump could withdraw the appeals, choosing not to fight as hard to bring the law to life. And while he cannot unilaterally do away with a law passed by Congress, enforcing it probably will not be a priority.

However, there is the possibility that the courts could rule in favor of the CTA, and Congress could pass laws to prioritize its enforcement. Right now, though, the CTA is a huge question mark. And as Erb points out, there are plenty of other not-yet-known wrinkles in tax law that can be expected this year.

One known financial issue coming up this year is employee health insurance, a cost that has risen faster than inflation for decades, and can currently be as much as a company’s profit margin. I talked to Nick Reber, CEO of employer benefit provider Garner Health, about what CFOs need to know about health insurance. An excerpt from our conversation is later in this newsletter.

ECONOMIC INDICATORS

While 2024 was a banner year for the stock market, 2025 is off to a much slower start. Last year, the S&P 500 increased 23.3%, while the Nasdaq composite was up 28.6% and the Dow was up 12.9%. With only three full trading days in 2025, it’s hard to pinpoint any trends, but each of the three indexes traded down last Thursday. Tesla saw the most significant drop—6.1%—after reporting fewer vehicle deliveries in 2024 than expected. Apple also saw its stock drop 2.6% after discounting iPhones in China. The three major indexes finished the week just barely making up for Thursday’s losses, and Tesla shares rebounded with record-high 2024 sales in China.

On Monday, tech rallied the markets once again. Nvidia CEO Jensen Huang gave a keynote address Monday night at the Consumer Electronics Show in Las Vegas, stoking investor excitement in the afternoon. Nvidia’s stock price popped 3%, temporarily boosting the AI processor maker to the world’s most valuable company. Semiconductor chip companies ASML, TSMC, Arm Holdings and Foxconn also saw a bump in their share prices. Nvidia saw another rally Tuesday morning, after Huang announced the soon-coming “ChatGPT moment for general robotics,” with partnerships for driver assistance and self-driving vehicles for Toyota, Aurora and Uber, as well as open platforms for training humanoid robots and a small and powerful new superchip, the Blackwell-based GB10, that will be available in a desktop system in May.

Beyond tech, the economic picture for the year is an unknown. While the Federal Reserve cut interest rates a quarter of a percent last month, the Fed said in a statement that rate cuts may not continue at the previously expected pace this year due to an “uncertain” economic outlook. Forbes senior contributor Bill Conerly projects the economy will continue to grow this year, but at a slower pace than 2024. Inflation, he writes, could also stick around at rates higher than the Federal Reserve’s 2% target due to Trump’s proposed immigration crackdown, which is likely to limit production capability at U.S. enterprises.

HUMAN CAPITAL

Employees at two major companies went on strike during the holiday shopping rush. And while unionized workers at Starbucks and Amazon returned to work without any concessions from their employers, both unions said these actions are just the beginning. Amazon workers represented by the International Brotherhood of Teamsters at warehouses in New York City, Atlanta, San Francisco, Skokie, Illinois and three other Southern California facilities went on strike on December 19, saying the company had not come to the negotiating table to discuss better working conditions and wages. The strike, which the Teamsters said was the largest ever against Amazon, ended December 26. But a union representative told CNN “stay tuned,” the workers were going to continue to push for their preferred contract.

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More than 5,000 unionized Starbucks workers at about 300 locations nationwide walked off the job for a strike that went as long as five days in some places to try to push the company to improve the wage offering in contract negotiations. The strike, which the union said was the biggest against the company, ended on Christmas Day. On its X account, the union said “These unfair labor practice strikes are an initial show of strength, and we’re just getting started.”

Both Amazon and Starbucks issued statements indicating that the strikes didn’t have a major impact on their operations, writes Forbes senior contributor Jack Kelly. Amazon says that the striking delivery drivers aren’t actually its employees, and are instead contractors recruited to manage package deliveries. However, labor advocates have said that the level of control Amazon has over these employees resembles a typical employer/employee relationship.

BENEFITS + RETIREMENT

Employee health insurance is one of the top costs for companies, and a recent study from Aon projects costs will be 9% higher this year, writes Forbes senior contributor Bruce Japsen. One of the biggest reasons for this increase, the study finds, is GLP-1 weight loss drugs, including Wegovy, Ozempic and Zepbound. In fact, Japsen writes, a new report from GlobalData indicates that Zepbound is likely to become the dominant GLP-1 drug this year because of its effectiveness and market expansion strategy. Without insurance, Zepbound costs just over $1,086 per fill. Eli Lilly says that insurance could lower Zepbound costs to $25.

While clinical trials of GLP-1s have shown a wide array of health benefits beyond just weight loss, Forbes senior contributor Joshua Cohen reports they aren’t yet saving insurers money in treatments for preventable health issues. An October study from pharmacy benefit manager Prime Therapeutics found that there had been no lowering of costs over two years of non-diabetics taking GLP-1 drugs. In fact, costs increased 46% for them.

OFF THE LEDGER

What CFOs Need To Know About Employee Healthcare Costs

Healthcare costs are rising faster than inflation, posting a 7% increase in 2023, versus a 3.8% inflation rate, according to the Peterson-KFF Health System Tracker. The cost to businesses just keeps growing. I talked to Nick Reber, CEO of employee benefit provider Garner Health, about what CFOs need to know. This conversation has been edited for length, continuity and clarity.

For workplace insurance, the supplier is generally the same for all employees. How do workplaces provide the best quality care but at the lowest cost?

Reber: There have not been great solutions over the last 20 years. The way that employers have dealt with this historically is they felt a tremendous need to offer broad insurance networks that allow their employees to have access to most every doctor: 95% of doctors are in employer insurance networks. Employers do that because they don’t want to lose employees. That makes some sense, but it’s sort of like if you told employees we’ll pay for wherever you go to dinner on business. You fly to LA, you can go to the most expensive restaurant or the least expensive restaurant, wherever you want the company will be covering it. That’s basically been the policy.

And therefore the only thing that employers have been able to do to control costs is not really control the underlying cost, but instead just increase deductibles and basically shift the burden on the employees. They haven’t really lowered healthcare costs. Now, by our estimates, about one in 100 employees go bankrupt, even if they have insurance, because they don’t have enough money to pay for their $3,500 deductible.

I think the big change is [going to be like] business travel 30, 40 years ago, going to go from employers being like, we’ll pay whatever—first class, business class—to hold on, hold on: This is how much we’re going to cover. [In health care,] we’re going to go to a world where you can get access to any provider, but you really need to see one that’s going to keep you healthy, keep you out of complications and repeat surgeries and at an effective cost. And if you go there, we’ll pay for all of it.

How does a CFO get a handle on these kinds of costs, especially because they also are working to control all kinds of different costs at the company?

This is where I think it’s going to be interesting because for the last 20 years, healthcare has been very high inflation, but such a small amount of the overall cost structure that it’s managed by the HR team typically. And now you’re looking at the point where healthcare costs are about as big as profit margins. So if you can cut healthcare costs by 10%, you can increase profitability by 10% almost.

Increasingly, what we’re seeing from employers is benefits budgets are either moving from the HR team onto the finance team, in terms of responsibility, or becoming a dual partnership, and setting financial limits. If the cost is increasing by 10%, it’s going to cut a big chunk out of your profits next year. CFOs and heads of finance and FP&A are getting more involved and trying to understand this stuff. We’re having calls with those people to educate them on the market.

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What are things that you think CFOs don’t know about this, but should?

I don’t think CFOs understand that healthcare is different than every other good and service. You think a higher cost restaurant is higher quality. In healthcare, the opposite is true. The higher quality doctors keep you healthier and are ultimately lower cost over time, and therefore it sort of breaks the mold of how traditional finance folks think about budgeting. A lot of folks say, I want my employees to have the highest quality care, so I’m happy to pay for anything. But actually that does a disservice to your employees. What you want to actually do is say, no, I want to help you find the highest quality care, and that will keep you healthy, which lowers cost. So you can have your cake and eat it too, in healthcare.

FACTS + COMMENTS

U.S. Steel and Nippon Steel jointly filed lawsuits in federal court over President Joe Biden’s blocking of the two companies’ merger for national security reasons.

$14.9 billion: How much the proposed deal was worth

$55: How much Nippon Steel pledged to pay for each current share of U.S. Steel, which is currently trading at about $33

‘The Transaction will enhance, not threaten, United States national security’: The two companies said in a statement

STRATEGIES + ADVICE

The recent holiday break was a long period of relaxation for many, but it’s time to get back to business. Here are some tips to ease back into work.

It takes a large degree of smarts to climb the corporate ladder to the C-suite, but it’s important that the employees you lead think you’re wise. Here are six strategies to be a wise leader.

VIDEO

QUIZ

Which company saw its stock price pop last week after some traders made a tangential connection to a video that meme stock king Keith Gill, also known as Roaring Kitty, posted on X?

A. Unity Software

B. GameStop

C. BlackBerry

D. AMC

See if you got it right here.