Despite the boom in popularity of expensive GLP-1 drugs to treat weight loss, fewer than one in five large employers are covering such prescriptions, a new KFF analysis shows.
And even those employers that do cover these drugs, which include Wegovy, Rybelsus, Saxenda, Zepbound and Ozempic, such coverage comes with conditions.
GLP-1 drugs, or Glucagon-like peptide-1 agonists, are used to help control blood sugar levels in people with type-2 diabetes and have also been shown to effectively help people lose weight. They are often used off label for weight loss.
But the high cost of these drugs, which can cost $700 to $1,400 a month before any insurance or rebates kick in, has raised issues among employers and health insurance companies who decide whether to pay for them, according to KFF’s 2024 benchmark Employer Health Survey, which included a random-sample of more than 2,100 large and small employers.
KFF’s analysis shows 18% of companies with 200 more employees cover GLP-1 drugs while 25% of employers with 1,000 or more workers cover such prescriptions “when used primarily for weight loss,” KFF’s analysis showed.
“Among large firms that offer the drugs, about half (53%) have conditions or requirements associated with their coverage,” KFF said in its analysis. “These conditions could present obstacles to accessing the drugs, such as first requiring a meeting with a dietician, psychologist, or other professional (24%); requiring participation in a lifestyle or weight-loss program either before (8%) or while (10%) taking the drugs; or another type of condition or requirement (26%). Coverage for these weight-loss drugs has significant cost implications for employers, as a previous KFF analysis estimated that almost 50 million adults in employer plans meet the clinical criteria for taking such drugs, which can cost thousands of dollars annually per person.”
For companies that do cover GLP-1 drugs for weight loss, one-third say it will have a “significant impact” on company spending on prescription drugs. “Employers face the challenge of integrating these potentially important treatments into their already costly benefit plans,” KFF Vice President and study author Gary Claxton said.
Annual family premiums for employer coverage rose 7% this year to more than $25,000 — an annual cost shared between workers and the businesses they work for, according to KFF’s survey.
Of the total $25,572 cost on average, workers are contributing $6,296 to the cost they contribute from their paychecks for their share of the total employer-paid premium. The worker share doesn’t include what they will pay in out-of-pocket costs in the form of co-payments, deductibles and other costs which vary according to their use of healthcare services.
“Employers are shelling out the equivalent of buying an economy car for every worker every year to pay for family coverage,” KFF President and CEO Drew Altman said. “In the tight labor market in recent years, they have not been able to continue offloading costs onto workers who are already struggling with health care bills.”
