The poll by MetLife found that nearly half of remote workers struggle to understand their employee benefits. As a result, these workers may end up choosing plans that do not meet their needs and they may also spend more time on trying to choose their benefits.

The survey results also reflect the challenges that employers continue to face in meeting their employees’ increasingly diverse needs and that they need to improve their communications, particularly with staff who are working remotely full-time — and especially if they are in another state.

It’s crucial that employers get this right in light of the importance these workers place on their employer-sponsored benefits.

The survey of 1,000 full-time employees at companies with at least two employees found that 61% of workers said that employee benefits are a significant part of what’s keeping them at their company. Those figures were even higher for work-from-home caregivers with children (72%) and millennial and Gen Z workers (67%).

Widespread concern

There are a number of benefit issues that concern remote workers. The survey found that:

• 45% of remote workers are struggling to understand their employee benefits, compared to 29% of their colleagues that work on-site.
• 55% of remote workers are highly anxious about their finances, compared to 46% of hybrid and on-site workers.
• 55% of telecommuters spend over one hour per week worrying about their benefits, compared to 37% of on-site and hybrid employees.

In fact, 65% of remote workers said that a better understanding of open enrollment would help make them feel more financially secure. That’s bad news for those employees, as their lack of knowledge can result in choosing the wrong plan, which may end up costing them more than necessary. As a result:

• Remote workers are twice as likely to say they enrolled in the wrong type of benefits last year.
• 57% of remote workers require more information to make the right benefit choices, compared to 47% of hybrid and on-site workers.

What you can do

Without clear communication, employees are less likely to understand and utilize their benefits.

Set up virtual information sessions where plan options, including key defining details and specific benefits, are outlined and covered clearly.

Depending on how many employees you have, you may want to consider offering a few sessions for them to choose from, to ensure they can all make it. If not, record the original session for employees to watch later if they can’t attend.

Also, you should make sure your human resources department is available for one-on-one questions. Some of your employees may need additional help in choosing a plan. You may want to consider offering phone or video chat meetings for them in case you need to show them documents and graphics.

Younger employees can be particularly difficult to reach. Some believe they are healthy enough to go without coverage, while others would rather keep the money they would otherwise pay in premiums.

But going uninsured can leave workers facing substantial medical bills if they become sick or injured. They may also miss out on preventive services that most health plans must cover without cost-sharing when provided in-network.

The resulting financial strain can hurt both employees and your organization. The challenge is convincing these workers that health coverage has value even if they rarely visit a doctor.

Strategies to boost participation

Employers can take these steps to reach workers who have little interest in open enrollment:

Focus on life events — Tailor communications to younger workers who may be getting married, starting families or approaching age 26, when dependent coverage under a parent’s health plan generally ends. Explain how these milestones can change their insurance needs.

Emphasize financial protection — Rather than focusing solely on premiums, explain what an emergency room visit, hospitalization or surgery could cost without insurance. Show employees how coverage can help protect their finances even if they rarely need medical care.

Simplify the numbers — Explain premiums, deductibles, copayments and out-of-pocket maximums in plain language. Provide side-by-side plan comparisons showing paycheck deductions and potential costs under different medical scenarios.

Use multiple communication channels —Supplement e-mail announcements with text reminders, short videos, workplace posters and messages from supervisors. Mobile-friendly communications are particularly important for younger, remote and frontline employees. Hold in-person meetings to explain how open enrollment works and why employees should review their options and choose a plan that fits their needs.

Make enrollment easy — Provide a streamlined online enrollment platform that works on smartphones. Include tools that help employees compare plans based on prescription costs and anticipated medical needs.

Offer personal assistance — Encourage workers to meet in person with your HR team to discuss their options. Employees may be more willing to enroll after having their questions answered privately.

Encourage action — Consider incentives for completing the enrollment process, such as prize drawings or department participation challenges. Reward completion rather than the decision to purchase coverage and ensure incentives comply with applicable rules.

Follow up with nonparticipants — Track enrollment completion and send targeted reminders before the deadline to choose a plan. Employees who have not responded may need a personal reminder or help navigating the process.

Review and improve the enrollment process

Employers should consider asking employees to review their benefits each year, even if they intend to decline coverage. Requiring workers to acknowledge their options can help prevent them from overlooking enrollment deadlines or missing important plan changes.

It’s also important that employers review plan rules and administrative requirements before eliminating automatic renewals. Doing that could backfire, especially for workers who are happy with their current plans.

Finally, survey employees after open enrollment to identify obstacles that kept them from participating. Their feedback can help HR teams improve communications and the process for the following year.

Those expenses can be particularly difficult for workers with limited savings or interrupted income. Employers can help by offering insurance that pays predetermined cash benefits for covered events or services, such as hospitalization or an emergency room visit.

Employees can use these benefits to cover medical expenses and everyday bills. As medical costs grow, insurers are introducing more of these plans.

Types of plans

Several types of fixed indemnity plans are available:

• Hospital indemnity plans: These pay set cash benefits for a covered hospital admission, each eligible day hospitalized or both. Some include additional benefits for intensive care.
• Emergency services indemnity plans: These pay fixed benefits for covered emergency room visits, ambulance transportation or other specified emergency services.
• Hospital and doctor fixed benefit plans: These combine scheduled benefits for a range of covered services, which may include physician visits, urgent care, emergency treatment, hospitalization, surgery, diagnostic testing and prescription medications.
• Accident indemnity plans: These pay a set cash benefit for covered accidental injuries and related care, such as treatment for fractures, emergency visits, surgery or hospitalization.
• Critical illness plans: These typically pay a lump sum following the diagnosis of a covered condition, such as cancer, a heart attack or a stroke.

How the coverage works

Fixed indemnity insurance pays a scheduled amount when an insured person experiences a covered event. The payment generally does not depend on the actual medical bill or how much the employee’s primary health insurance pays.

For example, a policy might pay $1,000 for a covered hospital admission and $200 for each covered day of hospitalization. An employee admitted for three eligible days would receive $1,600, subject to the policy’s terms.

Benefits are typically paid directly to the insured, although some policies allow payment to a provider.

These policies provide supplemental protection. They do not replace comprehensive health insurance and may pay only a portion of the expenses arising from a serious illness or injury.

Combining coverage

Employees may be able to combine policies to address different expenses. Someone with emergency treatment coverage and hospital indemnity insurance could receive an emergency room benefit followed by admission and daily confinement benefits if the event qualifies under each policy.

Each insurer determines coverage under its policy. Buying multiple plans does not guarantee that every service will trigger multiple payments.

Before offering coverage, employers should review benefit amounts, covered events, waiting periods, pre-existing condition restrictions and limits on payments or covered days.

Enrollment materials should explain these details with examples employees can understand. Employers can offer coverage as an employee-paid voluntary benefit or contribute toward premiums.

Who may benefit most

These plans may be especially useful for employees who:

• Have substantial deductibles or coinsurance under their existing health plan.
• Have limited emergency savings to absorb an unexpected medical expense.
• Would struggle to pay household bills after an unexpected event or medical service.

Employees should weigh premiums against the available benefits. Someone expecting regular care should also check whether waiting periods, exclusions or benefit limits would restrict payments.

Takeaway

Contact us to learn more about these increasingly important plans and evaluate options that can meet your staff’s needs.

One way employers can do that is through a points-based wellness program, which rewards employees with lower payroll deductions for health insurance when they attend health screenings, keep up with vaccinations and take steps to improve their health.

How the programs work

With these programs, employers work with a wellness plan administrator to establish a menu of eligible activities, assign point values and set a threshold employees must reach to earn a reward. A benefits platform or program administrator tracks participation and verifies completed activities.

Employees might earn points for:

• Attending an annual physical or dental checkup.
• Receiving recommended cancer screenings or vaccinations.
• Participating in diabetes education or health coaching.
• Completing nutrition, exercise or stress-management activities.
• Attending financial wellness sessions.

Employees who reach the required point total receive a discount on their health insurance contribution, often for the following plan year. Offering several ways to earn points helps workers choose activities relevant to their needs.

Shay Garrioch, chief human resources officer at the Culinary Institute of America, told Plansponsor, a trade publication, that the institute introduced a points-based program to encourage spending on smaller, proactive health care that might prevent larger claims later.

Employees who accumulate enough points receive a 10% premium discount the following year. Qualifying activities include physicals, dental visits, women’s health screenings, fitness challenges and meetings with a financial adviser. Garrioch said the institute has significantly reduced the frequency and cost of severe claims.

Where potential savings come from

The employee’s discount does not automatically reduce the health plan’s total premium or claims expenses. When an employer lowers the worker’s contribution without a corresponding reduction in plan costs, it generally assumes more of that expense. Administration and incentives also carry costs.

The potential financial benefit comes later, if participation helps employees avoid complications or manage existing conditions more effectively. Connecting someone with diabetes to ongoing treatment, for example, may help prevent an expensive hospitalization.

Self-funded employers pay claims directly, so lower claims can reduce their costs. For fully insured employers, improved claims experience may lead to more favorable renewal pricing, although medical inflation, the insurer’s rating practices and other factors also influence premiums.

Savings are not assured. A randomized study published in Health Affairs found that a workplace wellness program improved some reported health behaviors but did not significantly reduce spending after three years. Employers should evaluate results rather than assume participation alone produces savings.

What employers can do

• Work with your broker or administrator to prioritize appropriate preventive care and chronic-condition support.
• Explain how to earn points, meet deadlines and qualify for the premium discount to employees.
• Offer accessible activities for employees with different abilities and schedules.
• Have advisers review incentive rules, privacy protections and applicable wellness requirements.
• Track participation, claims trends and total program costs over several years.

The strongest approach connects rewards with useful care and follow-up support, giving employees an immediate financial benefit while pursuing better long-term health outcomes.

Many health insurers use prior authorization, which requires approval before the plan covers certain medical services, procedures or treatments. But employees who receive a denial may not realize that they have the right to appeal the decision — and that an initial denial is not necessarily the final word.

Recent research by Bloomberg News and KFF found that a significant share of appealed prior authorization denials is overturned. While the research examined Medicare Advantage, Medicaid-managed care and Affordable Care Act Marketplace plans rather than employer-sponsored group health plans, the findings highlight the potential value of challenging a denial.

Employers can help by educating workers about their appeal rights and directing them to their health plan’s procedures when care is denied.

A growing source of frustration

Prior authorization has become a hot-button issue as patients and doctors complain that the requirements can delay medically recommended care and create administrative headaches.

Health insurers say prior authorization helps prevent unnecessary or overly expensive care and control health care costs. However, criticism from patients, providers and policymakers has prompted the insurance industry to take steps to streamline the process.

Insurers participating in an industry initiative have pledged to reduce the number of services subject to prior authorization and standardize the way requests are submitted and reviewed. Industry groups have reported that participating insurers have reduced prior authorization requirements by about 11% so far, although reporting methods vary by insurer.

Still, denials remain common enough that employers may want to make sure workers know what to do when they receive one.

Appeals can succeed

A Bloomberg News analysis found that about half of prior authorization denials were reversed when appealed, with reversal rates reaching roughly nine in 10 for some plans.

KFF’s analysis of insurer data for 2025 found similarly significant reversal rates. Among appealed standard prior authorization denials, 43% were overturned in plans sold through the federally facilitated ACA marketplace.

At the same time, appeals are relatively rare. That suggests some patients may be abandoning recommended care after receiving an initial denial even though an appeal could have resulted in approval.

What employees can do

Employers and HR staff can encourage workers who receive a prior authorization denial to:

• Read the denial notice. Determine exactly why the request was denied and note all appeal deadlines and instructions.
• Contact their doctor. The provider may be able to supply additional medical records, correct missing information, resubmit the request or request a peer-to-peer review with the insurer.
• Contact the health plan. Ask what documentation and coverage criteria were used to make the decision and what is required for an appeal.
• File an internal appeal. Follow the procedures and deadlines listed in the denial notice and plan documents.
• Request expedited consideration when appropriate. Urgent situations in which a delay could seriously jeopardize a patient’s health may qualify for faster review.
• Explore external review rights. If the insurer upholds its denial, the employee may have the right to have the case reviewed by an independent outside organization.
• Keep records. Employees should retain denial letters, medical records, appeal documents and notes from conversations with the insurer and providers.

The takeaway

Employers don’t need to become involved in employees’ individual medical decisions. But providing clear information about appeal rights and directing workers to available resources may help them navigate a difficult process — and potentially gain approval for care their insurer initially denied.

However, a survey by human resources firm WorldatWork found that roughly 50% of employees spend less than an hour choosing their health plan despite the financial and health consequences that decision can carry throughout the year.

Employers and HR teams preparing for open enrollment should prioritize clear communication, decision-support tools and access to human resources staff that can help employees make the right choices for themselves.

Helping your employees

One of the biggest risks is that employees focus on the most visible costs like their premium contribution while overlooking out-of-pocket costs that could have a greater effect on their finances.

Consider an employee choosing between two plans. One has a lower deductible, making it appear to be the better deal. But it may also require higher coinsurance for a medication the employee takes regularly. Depending on the drug and its tier, those costs could outweigh any savings from the lower deductible.

Many health plan details are easy to overlook but can have significant financial consequences later. Encourage employees to choose a plan using the following checklist:

• Consider all costs. That includes your share of premiums, deductibles, copays, coinsurance, out-of-pocket maximums for medical services and prescription drugs.
• If you take medications, check the plan’s formulary before enrolling to ensure yours are covered and how much you would be expected to pay for it in copays or coinsurance. Mind the deductible as well.
• Look for prior authorization or other requirements that may affect access.
• Confirm that your physicians, specialists and preferred facilities are in the network of the plan you are considering. If you want to stick with your current plan, check to see that your preferred providers are still in network.

Provide different ways to get help

Employees have different preferences for learning about their benefits. They may benefit from a combination of benefits guides, webinars, question-and-answer sessions, benefits fairs and online decision-support tools. Use as many as you can.

Technology can help you compare plans based on their family circumstances, prescriptions, expected medical needs and preferred providers.

Additionally, set aside time for staff who may need one-on-one guidance so they can ask questions and understand their choices. Consider providing access to knowledgeable people who can answer questions when an employee’s situation is too complicated for an online tool.

The takeaway

While you invest heavily in your group health plans, if your staff are not reviewing all of their options, they may discover after enrollment that the plan they selected doesn’t work as expected.

Start communicating early, use multiple channels and give employees time and resources to compare their options carefully. We can help.

These plans give employers more skin in the game and the ability to better address cost drivers and tailor their offerings to fit the needs of their employees.

But while the plans can save both the employer and their workers money, they are not for every organization. Plus, there is a degree of risk as a few serious health issues among group participants can blow open claims costs.

Small employer considerations

While medium-sized and large organizations are more apt to self-fund due to their resources, 21% of employers with three to 199 plan participants were self-funded in 2025, according to a study by the Kaiser Family Foundation. That’s compared to employers with:

• 200 to 999 plan participants: 63%
• 1,000 to 4,999 plan participants: 86%
• 5,000 and more plan participants: 87%

Recently, insurers have been trying to address small and mid-sized employers’ concerns about risk and costs by rolling out “level-funded” plans. These vehicles provide a lower level of self-funding with a stop-loss insurance program that has lower attachment points than typical plans.

For level-funded plans, the insurer estimates the employer’s expected monthly expenses, which include:

• A portion of the estimated annual cost for benefits,
• The stop-loss protection premium, and
• An administrative fee.

The employer pays the above to the insurer every month. If, at the end of the year, claims were significantly higher or lower than expected, there will be financial reconciliation between the employer and the carrier.

These level-funded plans differ from fully self-funded plans, where the employer assumes direct financial responsibility for the costs of enrollees’ medical claims. The employer will usually contract with a third-party administrator or insurer to handle claims and provide administrative services for the plan.

Employers may purchase stop-loss coverage to protect against catastrophic claims.

Stop-loss basics

While these plans are called self-funded, there is still a portion of the costs that is insured to protect against catastrophic claims or unexpectedly high utilization.

There are different types of stop-loss insurance that pay the cost of claims at a certain attachment point, when plan, individual or claims spending exceeds a designated value:

Specific stop-loss coverage — This policy provides protection for the employer against a high claim on any one individual. This is protection against abnormal severity of a single claim, rather than abnormal frequency of claims in total.

Aggregate stop-loss coverage — This policy may limit the total amount the plan sponsor must pay for all claims over the plan year.

The benefits

Customization — Self-funded plans let employers customize their plan to meet the needs of their workforce.

Cost control — Self-funded plans only pay the actual costs, as opposed to fully insured plans, where the premium goes towards the expected health care costs the insurer has forecast, plus its overhead, reserves, profit margin, and more.

Access to claims data — The employer gets detailed access to claims costs, so they can see what claims are driving costs. By looking at claims and plan participant needs, the employer can better decide which benefits to provide, enhance or remove if they are not being used.

Disadvantages

Compliance — Since the employer will be paying for the claims, they will be responsible for fiduciary and compliance issues.

Cash flow — The plan will need to have sufficient money going into its accounts regularly to pay for claims as they arise.

Volatility — Medical outlays can be unpredictable. A spate of high-cost claims can wipe out any potential savings.

The takeaway

If you’re fed up with rising group health plan premiums, talk to us about self-funding. We can review your current insurance arrangement and your plan costs to help you decide if it’s right for you.

The Business Group on Health’s “2027 Employer Healthcare Strategy Survey” projects a median 9.2% increase in employer health care costs in 2027, which employers hope to reduce to about 8% through plan changes. Other forecasts predict similar premium increase in the coming year.

Multiple forces pushing costs higher

There is no single culprit behind the increases. Instead, employers are being hit by large claims, expensive prescription drugs and rising costs of treating common serious health conditions.

Catastrophic claims: According to a survey by the International Foundation of Employee Benefit Plans (IFEBP), employers cited catastrophic claims more often than any other factor as the primary driver of higher costs. A small number of employees play an outsized role in increasing average claims costs due to lengthy hospital stays, complex cancer treatments, specialty medications or other intensive care that can generate claims of hundreds of thousands of dollars or more.

Cancer is a major contributor. In the Business Group on Health survey, 70% of employers ranked cancer as the top condition driving their health care costs, and 92% placed it among their three most expensive conditions. Musculoskeletal conditions ranked second, cited by 68%, followed by cardiovascular conditions at 37%.

Prescription drugs: Pharmacy benefits now account for about one-quarter of employer health care spending, and drug costs are projected to increase 12% in 2026, according to Business Group on Health.

The pressure is coming from several directions. Among IFEBP respondents who identified specialty and other high-cost drugs as their primary cost driver:

• 67% cited GLP-1 drugs,
• 54% cited autoimmune and inflammatory therapies,
• 42% cited cancer drugs, and
• 21% cited cell and gene therapies.

Employers are grappling with how to provide access to effective but expensive treatments without allowing a small number of prescriptions to significantly increase total plan spending.

Medical care and provider pricing: Employers are also paying more for hospital and physician services.

Business Group on Health points to declining population health, rising provider prices and increased use of expensive therapies as part of the broader cost problem. Employers have also underestimated their health care costs for three consecutive years, illustrating how difficult medical expenses have become to predict.

Employers sharpen their cost-control strategies

With costs continuing to climb, employers are increasingly looking beyond simply raising deductibles and shifting more expenses to workers.

Approaches employers are considering include:

• Steering workers to high-value providers. Centers of excellence, high-performance networks and care navigation programs can direct employees to providers with better outcomes and more competitive pricing. Eighty-four percent of Business Group on Health respondents plan to offer at least one center of excellence in 2027.
• Reassessing pharmacy benefits. Employers are exploring transparent or next-generation pharmacy benefit managers that provide greater visibility into drug pricing and rebates. They are also tightening utilization controls on costly drugs, including GLP-1s, and encouraging the use of lower-cost biosimilars when clinically appropriate.
• Demanding more from vendors. Employers are scrutinizing wellness, digital health and other benefit programs for measurable results. In 2027, 58% of Business Group on Health respondents plan to replace underperforming vendors, while the same percentage plan to eliminate underutilized programs. Seventy-one percent are increasing the portion of vendor fees tied to outcomes.
• Improving employee navigation. Providing employees with cost and quality information before they schedule care may help them find higher-quality, lower-cost providers. Employers may also consider reducing cost-sharing for high-value preventive and chronic-condition care.
• Analyzing claims data. Claims audits, utilization reviews and predictive analytics can help employers identify billing problems, high-cost conditions and opportunities for earlier intervention.

The takeaway

With cost pressures coming from multiple directions, a targeted strategy focused on the plan’s largest cost drivers may help control spending while preserving the benefits employees value.

Work with us and your carriers to review claims and utilization data before renewal.

The Affordable Care Act and other laws require employers to furnish certain forms and documents to employees annually. To help your organization remain compliant, we’ve compiled a list of health and wellness plan notices that employers must provide annually, as well as a few that we recommend including in your benefits communications.

Most of these documents must be distributed during open enrollment.

Summary of Benefits and Coverage

The SBC gives employees a standardized, easy-to-compare summary of health plans’ benefits, deductibles, copayments, coinsurance, exclusions and coverage limitations. It is required for most group health plans, including self-insured plans.

When it must be distributed: With open enrollment materials when employees have an opportunity to elect or change coverage.

Medicare Part D Creditable Coverage Notice

Employers offering prescription drug coverage must notify Medicare-eligible employees whether their coverage is creditable under Medicare rules. Creditable coverage is expected to pay at least as much as standard Medicare Part D coverage.

While there is no penalty for employers for failing to send the notice, failure to provide it can lead to higher costs for staff who later enroll in Medicare Part D without having maintained creditable coverage. Because employers typically do not know which employees are eligible for Medicare, sending this notice to all employees is considered a best practice. You can find model notices here.

When it must be distributed: By Oct. 15 each year.

Grandfathered Plan Notice
This document outlines ACA protections for non-grandfathered plans, ensuring participants understand their coverage rights.

When it must be distributed: This notice must be distributed whenever a summary of benefits, description of coverage or enrollment material is provided to participants and beneficiaries.

Children’s Health Insurance Program Notice

This document alerts employees to the availability of premium assistance programs through their state of residence. This notice should be sent to all employees, regardless of location, to avoid the burden of tracking residency status. Failure to provide the CHIP notice can result in fines of up to $137 per employee per day.

When it must be distributed: Although it doesn’t have a fixed deadline, many employers include it in their annual open enrollment materials to ensure consistent delivery.

The Women’s Health and Cancer Rights Act Notice

This federally mandated disclosure informs group health plan participants and beneficiaries of their rights to post-mastectomy breast reconstruction benefits. It must be sent to all employee participants and covered beneficiaries under your health plan.

When it must be distributed: Annually, typically included with open enrollment materials.

Individual Coverage Health Reimbursement Arrangement Notice

Employers offering an ICHRA must give eligible employees a written notice explaining the arrangement and important consequences of accepting it. Among other things, the notice helps employees understand how the ICHRA interacts with individual health insurance coverage and eligibility for premium tax credits through the ACA Marketplace.

When it must be distributed: Generally, at least 90 calendar days before the beginning of each plan year. Employees who become eligible later, such as certain new hires, generally must receive the notice no later than the date the ICHRA can first take effect for them.

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.