Weight loss drugs are proving to be super popular among many workers with job-based health insurance. But GLP-1 medications are busting their employers’ budgets, leading some firms to rethink their coverage.
The share of very large firms covering these drugs for obesity soared to 43% this year, up from 28% last year, according to KFF’s latest annual Employer Health Benefits Survey, which was released on Wednesday. These employers, who have more than 5,000 workers, are much more likely than their smaller counterparts to offer such a benefit.
Among firms with between 200 and 999 staffers, only 16% provide coverage of drugs for weight loss this year, the same as last year, according to KFF, a nonpartisan health policy research group.
GLP-1 drugs, which treat diabetes, obesity and certain other conditions, have been in great demand since they came on the market a few years ago because they help patients shed pounds. While employers typically cover the medications for diabetes, fewer of them do so for weight loss, in part because of the drugs’ high prices — which have also limited Americans’ access to them. The list price of Wegovy, for instance, is about $1,350 for a month’s supply, though discounts are available.
Employers, however, recognize that covering the medications for weight loss is a valuable benefit to attract and retain talented staffers. Notably, even among firms that don’t do so, nearly half said the benefit is “very important” or “important” for employee satisfaction. More than 36 million people with job-based insurance have a body mass index that would medically qualify them for a GLP-1 drug.
“Large employers know these new high-priced weight-loss drugs are an important benefit for their workers, but their costs often exceed their expectations,” Gary Claxton, KFF senior vice president, said in a statement. “It’s not a surprise that some are rethinking access to the drugs for weight loss.”
Costs are higher than forecast because more workers are taking advantage of the benefit, KFF found. Nearly 60% of large firms said usage of the medications for weight loss is higher than they predicted, while two-thirds of such employers said the impact on their prescription drug spending was “significant.”
One employer KFF surveyed found that it spent more on GLP-1 medications than any other drug this year, up from 32nd place last year.
A large retailer told KFF, “Before we knew it, we spent half a million dollars and we’re projected to go up to $1.2 million the following year.”
The high costs of GLP-1 drugs have long been a source of frustration for many Americans. President Donald Trump set off a kerfuffle last week when he said that the medications would soon be available for $150, prompting Mehmet Oz, the Centers for Medicare and Medicaid Services administrator, to step in and say negotiations are ongoing.
Many employers told KFF they were looking at reducing coverage of the drugs through steps such as limiting eligibility to those with higher body mass indexes or requiring workers to participate in weight management programs.
“You have to have a coach, and then you can only stay on it for a certain amount of time before you have to get reevaluated,” one large manufacturer told KFF.
Other firms told KFF they have decided to drop the benefit for weight loss.
However, employers will likely have to reconsider their coverage again in coming years, especially as more workers demand coverage, and the drugs are approved for even more medical conditions. Plus, prices coming down.
“We’re still writing the story of what GLP-1 coverage looks like in employer plans,” said Matthew Rae, associate director of the Program on the Health Care Marketplace at KFF.
GLP-1 drug costs – and prescription drug prices in general – are also contributing to a rise in premiums.
Annual insurance coverage for a family hit $27,000, on average, this year, up 6% from 2024, according to KFF’s survey. Workers contribute $6,850 toward the cost, on average, while employers pick up the rest of the tab.
Meanwhile, individual coverage topped $9,300, on average, this year, up 5% – with employees shouldering $1,440 of the cost and employers paying the rest.
Over the past five years, the growth in premiums has been largely in line with inflation and wage increases.
But coverage for 2026 could be much pricier, according to several benefits consulting firms. KFF also points to GLP-1 medications, hospital prices and tariffs as factors that could push up premiums and out-of-pocket costs for workers next year.
“There is a quiet alarm bell going off,” Drew Altman, KFF’s CEO, said in a statement. “Employers have nothing new in their arsenal that can address most of the drivers of their cost increases, and that could well result in an increase in deductibles and other forms of employee cost sharing again, a strategy that neither employers nor employees like but companies resort to in a pinch to hold down premium increases.”
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