Growing Number of Employers Dropping GLP-1 Coverage

More employers are putting GLP-1 coverage on the chopping block as they prepare for a historic year of healthcare cost hikes.

New figures from the Business Group on Health (BGH) find that 14% of employers have already dropped or plan to drop coverage of GLP-1s for weight management by 2027.

Overall, fewer employers are covering GLP-1s to treat obesity, with coverage dropping from 72% in 2025 to 60% in 2026, according to BGH’s survey of 127 employers representing 8.7 million covered U.S. individuals. About a quarter (24%) have never offered coverage and are not considering it, and another 3% are considering coverage for 2028-2029.

The 14% figure of employers who have or plan to drop coverage of GLP-1s prescribed for weight management is up from earlier this year, when BGH found that 10% of employers said they likely would not cover them next year. 

Eileen Pincay, pharmacy practice leader at benefits and HR consultancy Segal, said it’s not surprising that a growing number of employers are dropping GLP-1 coverage as they deal with mounting healthcare costs and as many of them have yet to experience significant ROI on drug coverage.

“I’m seeing plans either drop coverage for GLP-1s for weight loss or seriously considering it,” she said. “Others aren’t taking out coverage altogether but are looking for ways to better manage their costs, such as increasing BMI thresholds or adding additional clinical criteria before members can qualify.”

The BGH survey comes shortly after Starbucks said it will no longer cover GLP-1 medications prescribed for weight loss for benefits-eligible employees starting in October — a move that demonstrates how significant the GLP-1 cost burden has become.

Article: What Starbucks’ GLP-1 Decision Indicates About Benefits Strategies 

GLP-1 drugs are showing promise for improved health outcomes, but the fact that 1 in 8 adults are currently taking a GLP-1, according to KFF — coupled with the drugs’ enormous price tag — is giving many employers pause. The brand-name injectable drugs typically cost between $1,000 and $1,500 a month for consumers, and employers may foot 70% to 100% of that bill.

“At the end of the day, the biggest issue is cost,” Pincay said. “We wouldn’t be having this conversation about a drug like metformin, even though that has been used off label for weight loss, because historically it has been pretty cheap. GLP-1s are a different story. GLP-1s work, employees want them, and they’re extremely expensive.”

Soaring Healthcare Costs

Plans to drop GLP coverage comes as the drugs are helping to balloon healthcare costs for organizations.  

BGH said that healthcare cost trend increases for 2027 will come in at a median of 9.2%, falling to 8% with plan design changes. Aon analysis recently projected even higher healthcare cost hikes next year, estimating that employer healthcare costs would jump 9.5% in 2027, pushing average spending above $19,000 per employee.

Pharmacy now represents an alarming 25% of employers’ total healthcare spend, and employer drug costs are estimated to rise 12% in 2026, a sharper uptick than overall trend, according to BGH. Factors contributing to the increase include the rapid growth in GLP-1 use for obesity and expanded indications; a broader availability of cell and gene therapies; and a greater prevalence of chronic conditions, among other factors. 

Toolkit: Essential Healthcare Cost Management Strategies

Healthcare cost volatility has intensified the need for an overhaul in strategies to mitigate healthcare costs and optimize health outcomes, said Brenna Shebel, vice president at Business Group on Health. 

“The compounding effect of these cost increases, coupled with the escalating volatility, drives employers to reassess core elements of their healthcare strategy,” she said. “For many organizations, this reality is also prompting greater involvement from CEOs, CFOs, and other senior leaders in health benefit decisions.”

While some employers are making tough decisions around specific programs or coverage approaches — including dropping GLP-1 coverage for weight loss — the broader trend is not simply cutting benefits and offerings, Shebel explained.

“Employers are increasingly focused on stronger vendor accountability, promoting higher-value care, and ensuring that the coverage of expensive treatments, including GLP-1s and cell and gene therapies, are thoughtfully designed,” she said. “The result is greater scrutiny of every healthcare dollar spent.”