Employers face rising healthcare costs from climate risks and new forecasting tool helps them assess the impact

Rhea-AI Summary

Mercer, a Marsh McLennan (NYSE: MMC) business, and the National Commission on Climate and Workforce Health have launched the Climate Health Cost Forecaster, a digital tool helping employers predict financial impacts of climate-driven health risks on their workforce. The tool combines weather data, epidemiological research, and Mercer's health cost modeling to provide location-specific risk assessments.

Key findings reveal employees in climate-controlled environments experience 40% lower healthcare costs compared to those in non-controlled settings. Industries like agriculture, utilities, and construction face up to double the healthcare cost risks due to climate factors. While 77% of workers report being affected by extreme climate events, only 4% of employers have assessed employee risk levels.

Positive

• Launch of innovative Climate Health Cost Forecaster tool provides data-driven projections for climate-related healthcare costs
• Tool enables employers to assess and plan for location-specific workforce health risks
• Employees in climate-controlled environments show 40% lower healthcare costs
• Partnership with Health Action Alliance strengthens workforce resilience initiatives

Negative

• Industries like agriculture, utilities, and construction face up to double the healthcare costs due to climate risks
• Only 4% of employers have assessed climate-related health risks despite 77% of workers being affected
• Different regions face varying severe climate risks, requiring complex mitigation strategies

NEW YORK, May 5, 2025 /PRNewswire/ -- Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, and the National Commission on Climate and Workforce Health, an initiative of the Health Action Alliance (HAA), today announced the launch of the Climate Health Cost Forecaster, a digital tool that enables employers to anticipate the financial impact of climate-driven health risks on their workforce.

This model, developed by Mercer, provides business leaders with data-driven projections that estimate the long-term healthcare costs associated with extreme heat, poor air quality, flooding and hurricanes. It offers a unique, localized view of workforce vulnerability across industries and geographies.

Extreme weather can have a range of direct and indirect health effects on individuals, from heat stroke to mental health issues, including depression. These events can at times be catastrophic, costing lives and leaving communities and businesses struggling to recover, rebuild and pay for the damage they left behind.

The Forecaster is powered by a combination of weather data, epidemiological research and Mercer's proprietary health cost modeling — data being brought together in a tool designed for employers. It gives companies a tangible way to assess and plan for the health-related financial risks a changing climate already imposes on their workforce.

Notably, the Forecaster reveals that employees working in climate-controlled environments experience approximately 40% lower healthcare costs on average compared to their counterparts in non-climate-controlled settings. Certain industries, including agriculture, utilities and construction, face up to double the healthcare cost risks due to climate-related factors.

"Employers now have access to data that makes the cost of climate-related health risks visible and actionable," said Susan Potter, Mercer's US and Canada President and Commission Co-Chair. "While 77% of workers say they've already been affected by extreme climate events, only 4% of employers have assessed which employees are most at risk. The Forecaster connects the dots between extreme weather, people risk and rising healthcare costs. It empowers business leaders to prioritize employee health and turn risk into readiness."

The tool is part of a growing portfolio of resources developed by HAA through the National Commission on Climate and Workforce Health. The Commission is presented by Mercer with additional support from Elevance Health and The Hartford, and brings together business, public health and sustainability leaders to mobilize employers in strengthening workforce resilience in the face of climate disruption.

"The Forecaster results may be surprising for some organizations, for example, the top risk across all industries in Portland, OR, is air quality, while the top risk in Hartford, CT, and Burlington, VT, is extreme heat. Of course, the results may fluctuate widely depending on an employer's industry and the portion of their workforce in a climate-controlled environment. Still, they illustrate the importance of knowing the risks in the locations where you do business," said Tracy Watts, Mercer's US Leader for Healthcare Policy. "You have to know the risk to address the risk."

David Leathers, HAA's Climate & Health Program Director, added: "We're proud to launch an innovative solution that brings the financial impact of extreme weather on workforce health into focus. With billion-dollar disasters accelerating—and hurricane and wildfire season around the corner—this couldn't be more timely."

Employers interested in exploring the Climate Health Cost Forecaster can access the tool here.

To learn more about the Commission, visit ClimateHealthCommission.org.

About Mercer

Mercer, a business of Marsh McLennan (NYSE: MMC), is a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit mercer.com, or follow on LinkedIn and X.

About the Health Action Alliance

The Health Action Alliance (HAA) is the nation's largest employer network focused on strengthening workforce and community health. Powered by Meteorite and founded in partnership with leading public health and business organizations, HAA equips over 11,000 companies with trusted guidance, actionable tools, and collaborative platforms to navigate emerging health challenges and build resilient, thriving workplaces. Among its signature initiatives is the National Commission on Climate and Workforce Health, a cross-sector effort helping employers respond to the growing health impacts of climate and extreme weather on the American workforce. Learn more at healthaction.org.

Media contacts:
Ashleigh Jang
Mercer
+1 212-345-3965
Ashleigh.Jang@mercer.com

Mariesa Kemble
608-345-2389
media@healthaction.org

 

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SOURCE Health Action Alliance

FAQ

What is Mercer's Climate Health Cost Forecaster and how does it work?

The Climate Health Cost Forecaster is a digital tool that combines weather data, epidemiological research, and Mercer's health cost modeling to help employers predict and assess the financial impact of climate-driven health risks on their workforce across different locations and industries.

How much can climate-controlled environments reduce healthcare costs according to MMC's research?

According to the Forecaster, employees working in climate-controlled environments experience approximately 40% lower healthcare costs on average compared to those in non-climate-controlled settings.

Which industries face the highest climate-related healthcare costs according to Mercer's tool?

Agriculture, utilities, and construction industries face up to double the healthcare cost risks due to climate-related factors compared to other industries.

What percentage of employers have assessed climate-related health risks to their workforce?

Only 4% of employers have assessed which employees are most at risk from climate-related health issues, despite 77% of workers reporting they've been affected by extreme climate events.

What are the top climate-related health risks in different US cities according to the MMC Forecaster?

The tool reveals that air quality is the top risk in Portland, OR, while extreme heat is the primary risk in Hartford, CT, and Burlington, VT.