Employers are facing an increasingly difficult benefits decision as demand for GLP-1 drugs grows: absorb the rapidly rising cost, restrict coverage or find another way to help employees access the weight-loss medications.
The financial pressure is significant. GLP-1 drugs prescribed for weight loss represented 11.4% of corporations’ annual claims in 2025, up from 6.9% in 2023, according to the International Foundation of Employee Benefit Plans. The foundation also found that only 36% of employers covered the drugs for weight loss
Demand, meanwhile, remains strong. A 2025 KFF poll found that one in eight U.S. adults was taking a GLP-1 medication for weight loss, diabetes or another condition.
That leaves employers trying to balance the immediate cost against the possibility that the medications may improve employee health and reduce other medical expenses over time. While some are opting not to cover the drugs for weight loss, others are exploring different ways to help workers access them.
Coverage with certain limitations
An employer can design coverage so that GLP-1 medications are covered only when prescribed to treat certain conditions, such as diabetes or chronic weight management, or when used for preventive care.
This approach can reduce the number of individuals requiring treatment under the plan and ultimately lower long-term treatment costs for these conditions.
An employer can also offer GLP-1 coverage while requiring medical management techniques, such as prior authorization, step therapy and site-of-care requirements.
Requiring one or a combination of medical management techniques before providing employees with GLP-1 coverage can encourage the use of alternative treatments and limit the number of employees who require GLP-1 medications.
Coverage under an HRA
An alternative to adding GLP-1 medications to a group health plan’s formulary is letting employees use a health reimbursement arrangement to cover GLP-1 drug costs. HRAs allow employees to receive tax-free reimbursement for all or a portion of their medical and prescription drug expenses.
Participants typically must enroll and participate in a weight management program to qualify for HRA reimbursement for a GLP-1 prescription.
The program evaluates each participant’s ongoing need for the medication and determines whether to approve the request. If approved, participants fill their prescriptions through a direct-to-consumer pharmacy. Employers can then use the HRA to reimburse all or a portion of the prescription cost.
Looking outside traditional insurance
Another emerging strategy is to bypass insurance.
Drug manufacturers and other vendors have developed direct-to-consumer programs that allow patients to obtain GLP-1 medications at lower cash prices. Employers that exclude weight-loss drugs from their regular pharmacy benefits may direct employees to one of these programs and, in some arrangements, reimburse part of the expense.
A similar direct-to-employer model may allow an employer to carve out GLP-1 weight-loss medications from its pharmacy benefit and obtain fixed, negotiated prices through a specialized vendor. These arrangements could reduce costs and make them more predictable, but employers should proceed carefully.
Purchases made outside the pharmacy benefit may not count toward an employee’s health plan deductible or out-of-pocket maximum. Moving prescriptions outside the traditional system may also make it more difficult to see a patient’s complete medication history, potentially creating care coordination and drug interaction concerns.
Employers also need to consider existing pharmacy benefit manager contracts, which may contain exclusivity provisions. Special care may be necessary for high-deductible health plans to avoid inadvertently affecting employees’ health savings account eligibility.
The takeaway
Much can hinge on how employers handle GLP-1 coverage and the options they provide their employees. The key is to provide access that supports employee health without allowing one fast-growing category of medications to overwhelm the benefits budget.
Before making changes, employers should work with us to review utilization, costs, plan design and alternative purchasing arrangements.
