Starbucks is dropping GLP-1 coverage prescribed for weight loss for its employees, according to reports this week — the latest indicator that employers are rethinking GLP-1 coverage as they face skyrocketing healthcare costs.
Starting in October, the Seattle-based coffee giant’s health plans will no longer cover GLP-1 medications prescribed for weight loss for benefits-eligible employees, Business Insider reported. Coverage for the medications may remain available when they’re used to treat other medical conditions. Starbucks provides health benefits to full- and part-time employees who work at least 20 hours a week.
“It’s not surprising,” Eileen Pincay, pharmacy practice leader at benefits and HR consultancy Segal, said of Starbucks’ decision. “I’m seeing plans either drop coverage for GLP-1s for weight loss or seriously considering it. 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.”
Although GLP-1 drugs are continuing to grow in popularity, employers are beginning to reassess coverage.
Consulting firm Mercer in June found that 6% of large employers dropped GLP-1 coverage this year. Another recent survey from Business Group on Health (BGH) found that of employers covering GLP-1s for weight management, only 72% said they were likely to continue coverage for the drugs in 2027, while 10% said they likely would not.
“Against the backdrop of anticipated double-digit healthcare cost increases, fueled to a large degree by GLP-1s and overall prescription drug costs, companies cannot ignore the reality that GLP-1s have significant implications for healthcare budgets — and overall affordability,” said Ellen Kelsay, BGH president and CEO in Washington, D.C.
Health benefit costs are on pace to increase 6.7% in 2026, pushing the average cost above $18,500 per employee, according to recent data from consulting firm Mercer. That’s a 15-year high.
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 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. Prescription drug costs are increasing around 13%-15% annually — and GLP-1 costs are fueling much of this growth as they currently comprise roughly 20% of total prescription drug costs, according to Aon data. Total GLP-1 spend increased around 50% in 2025 due to heightened utilization.
Awaiting ROI
Many employers are struggling with whether these costs are sustainable long term, Pincay said, while others are questioning whether they are making a meaningful enough impact on health outcomes to justify covering the drugs for weight loss.
“I am hearing a lot from my clients requesting help with understanding the long-term ROI,” she said. “They’re asking questions like, ‘Will these meds ultimately lower overall healthcare costs?’ and more importantly, ‘Will we see reductions in other comorbid conditions like hypertension, high cholesterol, and other obesity-related diseases?’ Many employers are still waiting for more long-term outcomes data before deciding if they want to start covering these drugs or to continue covering them.”
Sara Izadi, chief clinical officer at New York City-based health technology company Judi Health, agreed.
“Employers continue to face mounting pressure to manage rising pharmacy and healthcare costs and, in many cases, have yet to see clear ROI from GLP-1 utilization in their own employee population,” she said.
A Balancing Act
The GLP-1 decision is part of a balancing act for employers, Pincay said. Company and HR leaders are deciding between what’s most important — holding down one of the biggest healthcare cost drivers or offering a benefit that’s highly valued by employees.
“For some plans, GLP-1 coverage has become an important recruitment and maybe even retention tool,” Pincay said. “Employees are looking at these benefits and some may specifically want a job that provides these medications. Employers see that value, but they also have to manage the crazy financial burden.”
While more employers will join Starbucks in dropping GLP-1 coverage for weight loss as they weigh financial considerations, Pincay said a significant number of employers are taking a wait-and-see approach, especially since there are more products that will be entering the market.
“There’s hope that increased competition could eventually help bring costs down. I’m also seeing pharmacy benefit managers favor certain GLP-1 brands over others to drive market share and negotiate better rebates,” she explained. “Some employers are also keeping an eye on what’s happening with Medicare and other market developments, but it’s still too early to know how much impact those efforts will have on costs.”
Much of an employer’s decision, she said, comes down to financial considerations, workforce needs, and their overall benefits philosophy.
“Employers with more room in their benefit budget may be more willing to continue coverage, while others may determine the current cost is simply too difficult to absorb these skyrocketing costs,” Pincay said.
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