Why it may become harder to get coverage for GLP-1 weight-loss drugs

Weight-loss drugs are so popular and so expensive that they are the single largest contributor to a record-setting increase in the cost of employer-sponsored health insurance that is expected next year.

As the price for the drugs, including Wegovy and Zepbound, strains companies’ budgets, more employers are pulling back from covering them on their health care plans.

PepsiCo recently stopped covering weight-loss medications for its employees other than diabetics. The company sent employees a letter saying: “Prescription weight loss medications have become one of the fastest-growing costs in the PepsiCo Plans.”

Health insurer Cigna stopped covering the drugs this summer for its own workers.

The employer organization Business Group on Health found in a survey that two-thirds of companies currently cover drugs for weight loss, but 10 percent plan to drop the coverage in 2027.

Matthew Rae, who analyzes employer-sponsored health insurance at the KFF policy organization, said U.S. law allows companies to choose whether to cover most medications on their insurance plans. But GLP-1s are somewhat unique. Usually, the drugs that employers choose not to cover are rare ones, not medications used by more than 1 in 10 American adults.

Because poorly treated diabetes is so expensive, most employers do cover GLP-1s for Type 2 diabetics, Rae said. “Once you have someone who’s diabetic on your plan, you want to do everything you can to manage their diabetes, typically.” But many employers are stopping at diabetics and not covering weight-loss drugs for anyone else.

For people who rely on GLP-1s, the difference between an employer who covers the medications and one who doesn’t can mean shelling out hundreds of dollars a month, even as direct-to-consumer costs have declined.

Ashley Defay, who works in human resources in Chicago, started taking a GLP-1 while working for a company that covered it. “It was helping me with my brain fog. It was helping me lose the weight that I just couldn’t lose,” she said.

But then she switched employers and was surprised to learn her new company didn’t cover the drug. She and her doctor sought coverage multiple times, noting that she was prediabetic and diagnosed with sleep apnea - two conditions treated by the medication. But her new insurance denied her requests.

She reluctantly went off the medication. She regained the weight she had lost. She then decided to pay on her own for a modified drug from a compounding pharmacy, at a cost of about $200 a month. It didn’t help. “My doctor explained sometimes when people go off of Ozempic and then go back, it doesn’t work like it used to beforehand,” she said.

Deeply frustrated, she decided to switch to name-brand Zepbound. The cost of the medication - $450 a month - is eating up more than a third of the $15,000 raise that she got by switching jobs.

Most companies don’t make their formulary, or list of covered drugs on their insurance plans, publicly available. Defay said she wishes she had known before taking the job that its insurance didn’t cover GLP-1s. “Honestly I would have probably thought a little bit harder about taking the position for that reason alone,” she said.

Sara Drake, a pharmaceutical benefits expert at Marsh consulting, said her company found that 6 percent of employers dropped GLP-1 coverage in 2026 and another 5 percent plan to drop it in 2027. But many more - 27 percent - are placing new restrictions on coverage, like minimum body-mass index thresholds or diagnoses of sleep apnea or cardiac conditions.

“The employers really want to continue covering. They want to be an employer of choice. They recognize that this is an intervention for weight management that works,” Drake said. “At the same time, they’re really feeling constrained.”

Elliot Rosenblum, president of Symphony Consulting, a firm that helps midsize companies choose employee benefits, said, “It is becoming one of the most talked-about decisions they need to make: Do we pay for this or not?”

For some employers, the choice is basically out of their hands, Rosenblum said. He noted the distinction between self-funded coverage, in which employers, usually larger ones, pay every dollar out of their own budgets for their workers’ medical spending, and fully insured coverage, where employers pay premiums to insurance companies instead and the insurer covers the ultimate costs.

The employers who are fully insured, he said, might not be able to decide whether to cover GLP-1s for weight loss. The insurance companies might simply refuse to offer them that coverage, unable to make the math work of covering the drugs on a reasonably priced plan.

The CEO of Bank of America said his company is spending $250 million a year to pay for workers’ GLP-1s.

Weight-loss drugs, Rosenblum said, are somewhat analogous to in vitro fertilization, a pricey medical procedure not covered by many employer-sponsored health insurance plans but viewed as an attractive perk of the workplaces that do cover it. “It’s in the same camp as fertility, which is one that many employers don’t cover and some employers do,” he said. “And [those that do] certainly highlight the benefits that they offer and the robustness of their program.”

Rae said, however, that he doesn’t expect employers to start boasting about their GLP-1 coverage anytime soon as a way to attract workers. “I would be shocked if you did that, as an employer,” he said. “Employers all have this wait-and-see approach. How does this affect people’s other health care utilization? How long do people take these drugs for?”

Even if GLP-1s perhaps help people stay healthier in the long run, he noted, some early studies don’t show any short-term improvement in people’s health or reduction in their use of other health care. The drugs have been demonstrated to help with kidney, heart and liver disease, but the costs of those problems are often years down the road - beyond what an employer would typically care about.

“Among our clients, no one’s questioning the efficacy of the medication. It’s a game changer,” said Caroline Susie, a dietitian at Marsh who advises companies on their benefits packages. “It’s balancing empathy with economics. And in the short term, there just is not a return on investment.”