Recent findings from the Kaiser Family Foundation (KFF) indicate that employer-sponsored health plans are generally not covering GLP-1 medications for weight loss. Despite rising health plan costs in 2024, employers are hesitant to extend coverage for these popular weight loss drugs.
Rising Health Plan Costs
According to KFF, family premiums for employer-sponsored health plans rose by 7% in 2024, with employers absorbing most of this increase. The average annual premium for single coverage reached $8,951, while family coverage hit $25,572. However, this rise in costs has not led to expanded benefit offerings. The report notes that most major employers have excluded GLP-1 medications for weight loss from their 2024 benefits packages, alongside other services like in-vitro fertilization.
Employers Footing the Bill
The increase in employer-sponsored premiums over the past five years can be attributed to the rising costs of healthcare and inflation. In 2024, employers chose not to pass these increased costs onto employees. The average annual single coverage deductible for workers remained relatively stable at $1,787, a slight increase from $1,735 the previous year.
KFF President and CEO Drew Altman remarked that employers are investing significant sums into family coverage, equating to the price of an economy car for each employee annually. However, in a tight labor market, they have refrained from shifting costs onto workers already burdened with healthcare expenses.
Hesitance to Cover Weight Loss Drugs
Healthcare stakeholders have closely monitored whether employers would begin covering GLP-1 medications, initially designed for diabetes management but now marketed for rapid weight loss. An analysis by investment bank J.P. Morgan predicted that by 2030, around 30 million Americans—approximately 9% of the U.S. population—could be using GLP-1s for weight loss.
Despite consumer enthusiasm for these drugs, KFF’s findings reveal that fewer than 1 in 5 firms with 200 or more employees offered coverage for GLP-1s in 2024. For those that did provide coverage, employees often faced significant hurdles. More than 50% of large firms requiring employees to consult with a dietitian, psychologist, case worker, or therapist before obtaining a prescription. Additionally, 8% of large companies demanded that employees enroll in a lifestyle or weight loss program prior to accessing medication.
Cost Concerns
Employers may impose these conditions largely due to concerns about costs associated with GLP-1 drugs, which can range from hundreds to thousands of dollars per dose. Approximately one-third of large employers that offer GLP-1s reported that these medications would significantly impact their prescription drug spending in 2024. Some employers, including the North Carolina state government, have reconsidered their coverage options due to the financial burden.
Looking ahead, employer healthcare costs are projected to increase by 9% in 2025, according to a recent study by consultancy Aon. In this context, few employers appear willing to make new investments in costly medications. KFF found that only 3% of large firms currently not covering GLP-1s are “very likely” to do so next year, while about 25% say they are “somewhat likely” to expand their coverage.
This hesitance underscores the ongoing challenges in balancing employee health needs with the financial realities of employer-sponsored health plans.
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