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Employer-sponsored health plans are more likely to cover GLP-1s for weight loss

About one-third of employers surveyed by the International Foundation of Employee Benefit Plans offer GLP-1 coverage for both diabetes and weight loss.
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Iuliia Burmistrova/Getty Images

4 min read

Glucagon-like peptide-1 receptor agonists, or GLP-1s, are commonly prescribed to treat type-2 diabetes, but have more recently been approved for weight loss. If US adults are being prescribed GLP-1 drugs for weight loss through their health plan, they’re likely getting coverage through insurance that’s employer-sponsored, recent studies suggest.

More employers covering GLP-1s. Most health plans offered through the Affordable Care Act (ACA) marketplace cover GLP-1s for diabetes, but not for weight loss, a recent Kaiser Family Foundation (KFF) analysis found. While 82% of ACA plans include Ozempic for diabetes in their formularies, for example, just 1% cover either Saxenda or Wegovy, two GLP-1 drugs that have been approved only to treat obesity.

The share of people receiving private health insurance through the ACA is fairly small, KFF noted, as most people on private insurance get it through their employer. “Employer plans may be more likely to cover drugs for weight loss than ACA Marketplace plans given the desire to attract workers,” KFF researchers wrote.

A separate pulse survey conducted from May 22–29 by the International Foundation of Employee Benefit Plans (IFEBP) found that while the majority of employers (57%) cover GLP-1s solely for diabetes treatment, about one-third (34%) offer coverage of the drugs for both diabetes and weight loss. That’s up from 26% last year. Some 19% of employers said they were considering offering coverage of GLP-1 drugs for weight loss.

Where HR sees ROI in GLP-1s. The findings of the IFEBP survey suggest HR departments are fielding more questions about these drugs, said Julie Stitch, VP of content with the organization. Employees may be taking note of increased media coverage of the medications, promising study results, or new FDA approvals, she added.

“There’s a lot of attention being paid to it right now. And certainly, there has been success, people have lost weight while using this drug. So, others are noticing that,” she said. Employee attraction and retention is “almost always a given when you’re talking about employee benefits,” she added.

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The top factor employers are taking into account when considering GLP-1s for weight loss is “obesity as a risk factor for chronic diseases and associated costs,” according to the IFEBP survey. These medications may potentially help companies cut down on health costs driven by conditions associated with obesity, Cody Midlam, director and pharmacist consultant at professional services firm WTW, told HR Brew last year.

“Weight loss is a cornerstone to the management of many chronic conditions, like diabetes, hypertension,” he said. “The idea is that if we can lower weight to a healthy goal with these drugs, then it should result in downstream cost savings overall.”

Cost-control measures. While GLP-1 drugs may help save employers money in the long-run, the up-front costs are significant, with a price tag upwards of $10,000 per patient per year.

To control these costs, both ACA and employer-sponsored health plans employ “utilization management strategies,” the KFF and IFEBP research found. They may require prior authorization, for example, which stipulates patients have to meet certain criteria (such as being diagnosed as obese) in order to be prescribed the drugs, said Stitch. Step therapy—when an insurance company requires patients to try other treatments before covering the drug being requested—is another potential cost-control strategy, she added.

Healthcare companies working with employers to cover GLP-1s for weight loss have emphasized the medications aren’t a silver bullet, and recommend combining them with other treatments like nutrition counseling and exercise, HR Brew reported in February.

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.