Among the workplace benefits employees say they appreciate most are flexible work arrangements, paid time off, 401(k) retirement accounts, career development programs, and of course company health insurance plans. But now, many businesses are scaling back or ending an increasingly popular benefit within their wider healthcare coverage – paying for workers’ use of glucagon-like peptide-1 (GLP-1) medication for weight loss.
Initially developed to treat diabetes by regulating blood sugar levels, GLP-1 medication has become increasingly popular for losing weight. Recent surveys found that 60 percent of people taking Ozempic, Wegovy, Mounjaro, Saxenda, and other versions of the drug did so primarily for weight loss. But that surging demand has led pharmaceutical manufactures to repeatedly hike their prices for GPL-1s, which has spiked the costs of employer coverage of the drugs. As a result, many businesses are now having to rethink the terms of including those medications in their plans, or remove them entirely.
Most businesses had already had to adjust to the average 6 percent rise in their employee health insurance premiums this year, with many facing double-digit rises in 2026. At the same time, a recent joint study by nonprofits Peterson Center on Healthcare and KFF determined employee use of GLP-1s has been far higher than anyone had anticipated — mostly due to the drug’s growing use for weight loss. Those factors are adding to the financial pinch for employer health plans and forcing them to respond.
According to the Peterson-KFF survey, 19 percent of all employers with 200 employees or more cover GLP-1 use for losing weight in their health plans. But that rises to 30 percent among companies with 1,000-5,000 workers, and 43 percent for even bigger firms. Those latter figures represent a roughly 28 increase in coverage of the drug compared to 2024.
Not surprisingly, nearly a quarter of all employers said staff use GLP-1 drugs for weight loss was higher than they expected, with that number rising to nearly 60 percent at larger businesses. That led nearly a third of respondents to report those medications had “significantly impacted their prescription drug spending,” rising to 66 percent at companies with 5,000 workers or more.
“Before we knew it, we spent half a million dollars and were projected to go up to $1.2 million the following year,” a benefits manager with a retailing company said in anonymous comments to the Peterson-KFF survey about GLP-1 costs.
Many employers are responding to both rising premiums and higher medication costs by passing on some of the increases to employees, and inching up co-pays workers have to finance. But that probably won’t be enough to offset the surging costs of GLP-1s. As a result, most companies are revising the way their plans cover the medication.
Many businesses are limiting GLP-1 exclusively for diabetes treatment — with some requiring company health officials to approve that use beforehand. But because taking the medication has become so popular for weight loss, other employers don’t feel they can cut employees off from it.
On the one hand, by covering the drug under company health plans, some employers have found GLP-1s have become a de facto benefit capable of attracting new recruits, while also helping to retain existing workers. Meantime, a lot of businesses have calculated that as expensive as the medication is, its effectiveness in helping weight loss has led to reduced costs related to employee cardiovascular diseases and other conditions attributed to obesity.
Still, employers facing rising prices of the drug are having to stem its spreading use. In some cases, companies have decided to continue covering GLP-1s for weight loss, but only by employees above new body mass index (BMI) thresholds. Others additional measures include creating lifestyle and nutrition programs to make sure workers using the medication stay slimmer once they stop taking the medication.
“(W)e put in the requirement that you have type 2 diabetes for certain GLP-1s, and then we put in a BMI of 35 or higher for the weight loss GLP-1s,” a HR official with a manufacturing company said in survey comments, noting some employees had been “grandfathered in” for continued use while others will need to qualify for it in the future. “We are trying to decide how to manage this crazy cost of the GLP-1s.”
What’s behind that determination to keep covering GLP-1s?
It comes partly from employers’ desire to safeguard employees’ health while sparing them much of the costs of doing that. At the same time, a lot of managers already recognize GLP-1 medications are likely to become ever bigger factors in healthcare coverage. That’s growing increasingly likely with the number of diseases the drug has been shown to improve continuing to multiply over time.
As a result, even health insurance companies providing employee health coverage to business owners have warned that GLP-1 isn’t going away any time soon — whether the drugs are used for treating diabetes, losing weight, or addressing other conditions.
“Our insurance provider, Cigna told us that within the next nine to 12 months, there’s really not going to be a choice,” said a health manager with a manufacturing company in the survey comments. “(A)ll insurance companies are probably going to be covering GLP-1s for weight loss.”
And as a result, many employers are resolving themselves to do likewise — though they’re starting so set some limits.
Bruce Crumley
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