GLP-1 Weight Loss Drugs: A Strategic Decision Guide for Employers

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Should Employers Cover GLP-1 Weight Loss Drugs?

The conversation around GLP-1 medications, including Ozempic, Wegovy, Mounjaro, and Zepbound, has moved rapidly from social media into employer benefits strategy discussions. As organizations refine their 2025–2026 health plan designs, one major question continues to surface: Should we cover GLP-1 drugs for weight loss?

Understanding the GLP-1 Phenomenon

GLP-1 (glucagon-like peptide-1) medications mimic a natural hormone that regulates blood sugar and appetite. Originally approved for type 2 diabetes, several medications gained FDA approval for weight loss in 2021. Since then, prescriptions have increased by more than 300%.

Typical weight loss outcomes:

  • 15% average weight loss after one year
  • Compared to 5% with lifestyle interventions alone
  • Monthly cost ranges from $1,200–$1,500 per employee
What This Means for Employers: Demand is rising. Employees are increasingly asking about GLP-1 access during open enrollment and even during the hiring process.

The Real Cost of Obesity

Obesity affects more than 40% of U.S. adults, contributing to significant medical and productivity costs:

  • $173 billion in annual healthcare spending
  • $1,800 more per year in medical costs per employee with obesity
  • Higher rates of absenteeism and presenteeism

Because obesity is rarely coded alone in claims data, employers often underestimate how many members would qualify for or seek GLP-1 medications.

What This Means for Employers: Your at-risk population may be larger than you think, which makes weight-management strategies increasingly important.

The Coverage Landscape

Current employer coverage trends:

  • 65% of employers exclude weight-loss indications for GLP-1 drugs
  • Fully insured plans often lack flexibility to add weight-loss coverage
  • Self-insured employers can model financial impact and define criteria

If even 10% of eligible employees use these medications, employer cost can increase by $30 PEPM or more.

What This Means for Employers: Self-funded organizations have more strategic flexibility, but financial modeling is essential before making coverage decisions.

Beyond Cost: Strategic Considerations for Employers

Recruitment & Retention Impact

Employee expectations are evolving. Surveys show:

  • 31% of employees would consider switching employers for GLP-1 coverage
  • High-turnover industries may view this as a competitive differentiator
What This Means for Employers: Weight loss medication coverage can strengthen your employer value proposition, especially among younger and health-conscious talent segments.

Long-Term Investment Reality

GLP-1 medications require long-term use to maintain weight loss. When discontinued, weight typically rebounds. Retention matters: If employees leave before long-term savings are realized, the next employer gets the benefit.

What This Means for Employers: Evaluate coverage decisions through a workforce stability lens, not just a cost lens.

Clinical Realities & Safety Considerations

Up to 70% of GLP-1 users discontinue within 18 months due to:

  • Gastrointestinal discomfort
  • Fatigue, nausea, diarrhea
  • Risk of pancreatitis or gallbladder issues
  • Loss of lean muscle mass
  • Uncertain long-term effects
What This Means for Employers: Expect discontinuation variability and consider wrap-around programs to support safe, sustained use.

Alternatives to GLP-1 Coverage

  1. Comprehensive Wellness Programs: Focus on nutrition, behavioral support, and lifestyle coaching.
  2. Lifestyle Spending Accounts (LSAs): Provide flexible funding for fitness, nutrition counseling, or weight-management tools.
  3. Bariatric Surgery Coverage: Though more costly upfront, surgery may offer long-term value under the right conditions.
  4. Enhanced Prior Authorization Processes: Require lab work, BMI validation, and lifestyle intervention attempts before approval.
What This Means for Employers: You can influence health outcomes without fully covering GLP-1 medications.

Managing Off-Label Use

When coverage excludes weight loss but includes diabetes, some employees may attempt to obtain GLP-1 medication through misreported diagnoses.

To help manage off-label use, employers should:

  • Monitor spikes in diabetes claims
  • Strengthen approval criteria
  • Require clinical documentation
What This Means for Employers: Better oversight protects both cost and clinical integrity.

Compounded GLP-1 Medications

Compounded versions may cost $100–$300 per month, but lack FDA approval and quality control.

What This Means for Employers: Use caution. Work with PBMs to explore approved alternatives first.

Health Equity Considerations

Obesity disproportionately impacts Black and Hispanic populations due to social determinants of health. Benefit coverage decisions may affect these groups differently.

What This Means for Employers: Align GLP-1 decisions with DEI goals and consider virtual care and wellness programs to close access gaps.

Making the Decision: Questions to Ask

  • What are your retention and recruiting challenges?
  • What is the obesity-related cost burden in your organization?
  • How long do employees typically stay?
  • Do you have wellness programs that can support lifestyle change?
  • Are you fully insured or self-funded?

Communicating Your Decision

Whether you add or exclude coverage, communication is critical:

  • Explain the reasoning clearly
  • Align decisions with your wellness strategy
  • Give employees adequate notice
  • Highlight alternatives and support options
What This Means for Employers: Clear communication supports trust and helps employees navigate available resources.

The Silver Lining

The national conversation around GLP-1 medications is reframing obesity as a treatable condition rather than a personal failing. Employers now have an opportunity to implement holistic health strategies that drive long-term wellbeing.

Ready to Evaluate Your Options?

GLP-1 coverage decisions require thoughtful analysis of cost, clinical evidence, and workforce strategy. OneDigital can help you:

  • Model the financial impact of GLP-1 coverage
  • Build wellness and weight-management programs
  • Evaluate alternatives and support accountable utilization
  • Develop communication strategies for your workforce

Contact your OneDigital consultant to explore whether GLP-1 medications fit into your benefits strategy and how to support long-term employee wellbeing in a sustainable, cost-effective way.

Publish Date:Dec 18, 2025Categories:Employee Benefits