Your Employer May Start Covering Weight-Loss Drugs Soon
Hoping your company will begin paying for anti-obesity medications like Wegovy? You may be in luck.
A growing number of employers are considering covering the blockbuster weight-loss drugs, several surveys show. Workers will learn whether they’ll gain such coverage for the coming year during open enrollment, which launches this month at many companies.
GLP-1 drugs, which treat diabetes, obesity, and certain other conditions, have become super popular since they came on the market a few years ago because they help patients shed pounds. While employers typically cover the medications for diabetes, fewer of them do so for weight loss, in part because of the drugs’ high prices—which have also limited Americans’ access to them.
The list price for Wegovy, for instance, is about $1,350 for a four-week supply. Nearly 40 million people with employer coverage are estimated to be eligible for anti-obesity medications based on their body mass index, according to KFF, a health policy research organization.
“It could have a huge impact on premiums given the cost of the drugs,” said Matthew Rae, the associate director of KFF’s Program on the Health Care Marketplace.
Still, more than a quarter of employers are considering adding coverage for GLP-1 drugs for weight loss in 2025 or 2026, according to a national survey conducted this year by Mercer, a human resources consulting firm.
Roughly the same share say they are somewhat or very likely to begin covering these medications for weight loss within the next 12 months, according to KFF’s annual Employer Health Benefits Survey.
The chances of your employer covering an anti-obesity drug depends on its size—bigger organizations are much more likely to offer the benefit than smaller ones.
Workers are eligible for the GLP-1 medications for obesity treatment at 67% of the large companies in the Business Group on Health’s 2024 report, which surveyed mostly firms with more than 10,000 employees.
Mercer’s report, which looked at employers with at least 500 workers, found that just over half are providing such coverage this year. But only 18% of firms in KFF’s survey, which includes those with 200 or more employees, cover GLP-1 drugs primarily for weight loss.
Even employers that provide coverage for anti-obesity drugs often put up guardrails, such as requiring employees to receive prior authorization or to try other weight-loss methods first. Some have higher thresholds for body mass index than the Food and Drug Administration’s definition of at least 30 for adults or mandate that workers participate in weight management programs.
“Even as more employers are adding the coverage, more employers are also adding controls on the coverage to really target it to the people who need it the most and will benefit the most,” said Beth Umland, director of research, health and benefits, at Mercer, which found that 35% of employers in its 2023 survey had some type of guardrails.
Though many workers are clamoring for anti-obesity drug coverage, providing the benefit is simply too difficult or costly for some companies. Mercer’s study found that 10% of employers that covered the medications in 2024 were considering dropping coverage and 3% recently discontinued it or plan to do so.
Earlier this year, Eileen Pabon, who manages benefits and wellness for DSV Air & Sea US, was shocked to find out that the company’s prescription drug costs had soared by $400,000 over several months. She learned that several employees who did not have diabetes had started taking GLP-1 drugs. DSV, a global transportation company based in New Jersey, had not put any restrictions on its coverage.
So the firm, which provides health insurance to about 8,000 people, began requiring a diabetes diagnosis.
“It just wouldn’t be financially wise for us to cover it for weight loss only,” she said. “It would force us the raise the cost of health insurance coverage for the employees.”
Premiums Top $25,000
The cost of family health insurance benefits at work hit nearly $25,600 this year, up 7% from a year ago, according to KFF’s annual survey. It’s the first time the total premium crossed the $25,000 threshold.
Workers were responsible for about $6,300 of that tab, while employers shelled out nearly $19,300.
Over the last five years, the 24% rise in family health insurance premiums has been roughly in line with the 23% jump in inflation and 28% increase in workers’ wages, KFF found.
The average annual premium for single coverage was nearly $9,000 this year, up 6% from the prior year. Employees paid about $1,370, while their employers picked up nearly $7,600.
Costs are expected to continue their upward march in 2025, due in part to rising prescription drug expenses and health care prices overall, according to surveys from several consulting firms. Inflation in the health care sector typically lags the general economy since insurers and providers usually negotiate multi-year contracts.
The total cost of health benefits per employee is expected to rise 5.8%, on average, in 2025, even after employers implement cost-reduction measures, according to Mercer. It’s the third year in a row that costs climbed at least 5%.
Key Takeaways:
- More employers are considering covering anti-obesity medications like Wegovy, but coverage is often limited by high drug costs and concerns about rising healthcare premiums.
- The increased interest in covering these drugs reflects their effectiveness in promoting weight loss and addressing the growing obesity epidemic.
- However, the financial implications of providing coverage for these expensive medications raise concerns for employers and impact the cost of health insurance plans.
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