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GLP-1 drugs like Ozempic gained traction in the press for helping many, including celebrities, lose significant amounts of weight quickly.
But today, Ozempic and other semaglutide drugs, first approved for treating diabetes in 2017 and for obesity in 2021, are no longer just the favored (off label) weight loss method of Hollywood stars. Spending on GLP-1s rose to nearly $72 billion in 2023, up 500% from five years earlier. Employers are also increasingly covering GLP-1 drugs for weight loss, though the high price tag has prompted some to pull back on the benefit.
Aflac is one such employer. Last year the insurance company stopped covering GLP-1 drugs for weight loss over cost concerns, Tricia Griggs, Aflac’s manager of wellness and safety, told HR Brew. Around the same time, it expanded access to gym memberships through Wellhub for its 6,000-person US workforce.
Why Aflac says it no longer covers GLP-1s. In the summer of 2023, Griggs says she started having conversations with her team about ending coverage of GLP-1 drugs for employees seeking weight loss treatments. Aflac had covered the drugs for as long as they’d been on the market (the FDA first approved a GLP-1 precursor to semaglutides for obesity in 2014), and in 2022 they started seeing a major increase in workers seeking them out, Griggs said.
The decision was “strictly financial,” Griggs said, and had nothing to do with the efficacy of the drugs. Some studies have shown GLP-1 users lose an average of 10% to 15% of their body weight in the course of a year, with more effective GLP-1 medications even leading to a 20% reduction. The drugs have a hefty price tag, though, as out-of-pocket costs are estimated to be around $1,000 a month. More than one-quarter of employers reported GLP-1 drugs for weight loss represented more than 15% of their total annual claims in 2024, according to a survey from the International Foundation of Employee Benefits Plans.
“Unfortunately, the spend was outrageous,” Griggs said, estimating Aflac was spending “millions of dollars a year” on GLP-1s. She expressed concern about GLP-1 spending potentially affecting Aflac’s ability to pay for other medical coverage, such as a cancer claim. Aflac still covers GLP-1s for diabetes.
Around the time Aflac discussed dropping GLP-1 coverage in 2023, Griggs and her team realized they were already paying for about 300 people to be on a starter gym plan through Wellhub, the corporate wellness platform that was formerly Gympass.
“What would it look like if we just paid for all Aflac employees to have access to the starter plan for free?” she recalled asking. “It wasn’t bad. So that’s what we did.”
A wait and see. About 44% of Aflac employees use Wellhub, according to Griggs, which offers access not only to gyms and fitness studios, but also apps geared toward financial health, meditation and sleep, as well as therapy.
Since Aflac began covering starter plans for gym memberships through Wellhub in 2023, about 1,300 employees have signed up for it, Griggs estimated. She said not all employees see the fitness offerings as a substitute for GLP-1 coverage, and some even email her to inquire about when Aflac might start covering the medications for weight loss again.
“We have that small group who are just determined that [a GLP-1 is] the only answer, and they’re not going to attempt anything else,” she said. A larger share of employees, though, are open to pursuing other methods for weight loss, like a gym membership, she added. (Medical experts say the drugs are most effective when combined with dietary changes and exercise, and as such some employers are incorporating these offerings into their benefits plans alongside GLP-1s.)
As HR leaders are trying to contain rising health costs, they’re also experiencing “pressure around pharmaceutical interventions,” said Carolee Gearhart, Wellhub’s chief revenue officer. Platforms like Wellhub may appeal to employers who want to promote exercise and healthy lifestyles.
Some research suggests employers may eventually see a return from investing in GLP-1s for their workers, despite the high costs. An analysis of US commercial health claims conducted by Aon found that while costs jumped during the first year GLP-1 medications were prescribed, cost growth rates for GLP-1 patients trended downward the second year, averaging half of the growth rate for patients who weren’t taking the drugs.
“We thought that was encouraging, because what it tells us is that there is a bending of the cost inflation,” said Anthony Scattone, deputy chief people officer with Aon. He noted that GLP-1 users saw their risk of hospitalization from “major adverse cardiovascular events,” such as strokes or heart attacks, drop by 44%.
Griggs said she’ll be keeping a close eye on research related to GLP-1s and how they might affect Aflac’s spending on other conditions, like high blood pressure or chronic diseases. “It is a topic that is not completely off the table,” she said.