Weight Loss Treatment Drugs
Key factors to consider when adding obesity treatment options to your benefits plan
Considering adding weight loss drugs to your benefits plan?
Here’s what you need to know
Weight loss drugs are all the rage these days. Demand for these medications, coupled with increasing public health awareness of obesity treatment options, has created a perfect storm for plan sponsors. But before deciding whether to add this treatment option to your benefits plan, there are numerous factors employers should explore.
Hear from our HUB leaders as they take a multi-faceted look at weight loss drugs, highlighting key factors you should consider when weighing adding obesity treatment options to your benefits plan.
Kayla Clark, National Director, Clinical Pharmacy, HUB International
Matthew Moore, Regional Pharmacy Consultant, HUB International
Recently, GLP-1s (glucagon like peptide-1 receptor agonists) have gained notoriety in the news and social media as effective treatments for weight loss or diabetes. While treating diabetes is something employers are very accustomed to, thinking about coverage for medication-assisted weight loss are newer concepts for many – and have prompted a more complex decision-making process.
Here are three key pharmacy benefits considerations for obesity treatment drugs:
COVERAGE AS A CLASS OF MEDICATION
Although there are pros and cons to each type of anti-obesity medication (AOMs), GLP-1s have proven to be more effective1, at least short term, at reducing weight compared to other AOMs, which has led to their popularity. GLP-1 medications indicated for weight loss – such as Saxenda™, Wegovy™ and Zepbound™ – are also much more expensive than other AOMs on the market that assist with weight loss and must be paired with behavior modification, exercise and other lifestyle adjustments.2
Today, self-funded employers generally have the option to cover or exclude AOMs as part of their benefit plan. If an employer elects in favor of coverage, the entire category of products indicated for weight loss will be covered subject to PBM and carrier formulary rules, not just GLP-1s. Employers looking at adding coverage need to carefully understand the options and cost implications for their population. Subject matter experts at HUB are trained to help employers use demographic, clinical and other plan insights to make informed decisions about coverage of these medications.
INTEGRATION WITH EXISTING BENEFITS
In general, coverage of AOMs for weight loss will have little conflict or overlap with other health and wellness offerings. However, to maintain a consistent message, employers should confirm how weight loss or bariatric surgery is covered on the medical plan, and if so, what type of criteria or coverage protocols are required.
Employers should also be aware of wellness vendors’ point of view on weight-loss support programs. Some vendors specifically advocate weight loss without medication and are actively “deprescribing” medications as part of their program, whereas others have a medication-assisted approach. HUB subject matter experts can review and compare program attributes, as well as develop client-specific communications to support the announcement and appropriate use of these programs.
LONG-TERM WORKPLACE WELLNESS CONSIDERATIONS
The health detriments of obesity are well known and far reaching. There are likely additional social, emotional and mental health costs that are not easily measured.3 So, it is no wonder that these promising new weight-loss medications have captivated our attention and are causing plan sponsors across the country to carefully revisit this topic.
Many employees will see coverage of weight-loss medications as an additional perk that will be perceived as a great enhancement to the benefits package, sending a strong message that the employer is willing to invest in their long-term health and wellbeing. However, the expense of covering these medications, as well as the overall long-term benefit, requires careful plan evaluation.
1 National Library of Medicine, “Comparative effectiveness of GLP-1 receptor agonists on glycaemic control, body weight, and lipid profile for type 2 diabetes: systemic review and network meta-analysis,” January 29, 2024.
2 The New York Times, “Buried in Wegovy Costs, North Carolina Will Stop Paying for Obesity Drugs,” January 26, 2024.
3 Economist Impact, “Social determinants of health and obesity,” accessed August 7, 2024.
Cory Jorbin, Director of Compliance Consulting, National Employee Benefits, HUB International
Many employer-sponsored plans are debating whether to cover weight loss medications under their plans and, if so, what guardrails to put in place to help manage utilization and plan expenses.
Here are 3 key compliance considerations for obesity treatment drugs:
REGULATORY COMPLIANCE
The only obesity related coverage that is currently REQUIRED falls under the Affordable Care Act (“ACA”) which incorporates the US Preventive Services Task Force A and B recommendations. Non-grandfathered health plans must cover at 100% screening for obesity in adults, and intensive, multicomponent behavioral interventions for weight management for those with a BMI of 30 or higher. However, this does not require specific coverage for actual weight loss treatment or medications.
In other words, while there’s no law in place preventing an employer from covering weight loss treatment drugs, no laws require them to do so.
NONDISCRIMINATION AND INCLUSION
There are 3 bodies of law governing nondiscrimination and inclusion—the Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA), and HIPAA.
ADA regulations include very specific language prohibiting plan designs – often called exclusions and limitations – from discriminating on the basis of an ADA-qualifying condition.
Some courts have determined severe obesity to be a physical impairment, while others have held it to be an impairment under the ADA ONLY if it’s the result of an underlying physiological disorder or condition. Because of this, we recommend consulting with counsel for specific legal advice on the ADA.
GINA protects employees from discrimination based on genetic information – which obesity may relate to.
For example, an employer could not reassign someone whom it learned had a family medical history of heart disease from a job it believed would be too stressful and might eventually lead to heart-related problems for the employee.
This means that a uniform and consistent exclusion for obesity drug coverage across a plan – as long as it’s not individually applied – MAY NOT run afoul of GINA.
HIPAA protects employees from discrimination on the basis of health factors. HIPAA states that any restrictions on benefits must apply uniformly to all similarly situated individuals and must not be directed at individual participants or based on the health factor of any one individual.
What all of this means for weight loss drugs is that any decision to exclude these medications must be applied uniformly across an organization.
A fourth area of law, the Mental Health Parity and Addiction Equity Act (“MHPAEA”) may also play a role in certain instances. MHPAEA requires plans to treat mental health/substance use disorder benefits in parity with medical/surgical benefits. While MHPAEA doesn’t require plans to cover weight loss medications, it may play a role if an individual is prescribed such a medication in connection with an eating disorder.
ACCESSIBILITY AND AFFORDABILITY
If a plan covers weight loss treatment drugs, participants will get the benefit of the negotiated rates. However, since these medications are newer and generics are not yet available, negotiated rates may still be costly, particularly in high deductible health plans.
Weight loss drugs are expensive—for employers and employees alike. Tools like Health Savings, Flexible Spending and Health Reimbursement Accounts may help manage costs, or at least provide some tax benefits in paying these costs.
Kirsten Bot, National Director, Actuarial Services and Financial Consulting, HUB International
Kayla Clark, National Director, Clinical Pharmacy, HUB International
Obesity costs the U.S. healthcare system an estimated $173 billion annually,1 with some surveys estimating an obese patient will incur more than $2,000 more per year in medical costs than a healthy individual.2 When considering anti-obesity medication (AOM) coverage, it is important to consider all costs as well as return on investment in long-term employee health and wellness and dollars spent. The question moving forward is not just “should we cover these medications?” but “how should we cover these medications?”
Here are three key cost and implementation considerations for AOMs:
DIRECT COST OF IMPLEMENTATION
Today, glucagon like peptide-1 receptor agonists (GLP-1) medications for weight loss cost between $900 to $1,000 a month prior to plan discounts and rebates.3 It is important to review and understand PBM and carrier options available to manage appropriate access, utilization and deliver patient support. Subject matter experts at HUB are trained to help employers use demographic, clinical and other plan insights to make informed decisions about coverage of these medications. Our financial consulting and analytics teams have the tools to assist with pricing impact as employers consider covering these medications.
TANGENTIAL COSTS
Although AOM coverage will likely be viewed as a welcome addition by most participants, weight-loss drug coverage may lead to overall cost hikes, including long-term plan cost increases. In addition to implementing appropriate utilization management criteria, employers must also consider costs of additional wellness programs that may be needed to sustain weight loss with these medications. After one year of therapy, it has been found that 58% of users discontinue their medication for various reasons, such as side effects, cost and/or access to the medication.4 To capitalize on return-on-investment, it is imperative that employees are supported wholistically while they’re on GLP-1 therapy, so they can avoid weight gain once the medication is discontinued.
PERIODIC EVALUATION NEEDED
There are many GLP-1s in development as well as current medications being tested for additional FDA-approved indications.5 Current research includes using GLP-1s for some types of liver disease6 sleep apnea improvement7, neurological diseases (such as Parkinson’s8) and addiction treatment.9 Rely on HUB to help you navigate these coverage changes as the pharmacy benefit managers react to new indication approvals. As employers consider all the moving pieces of adding AOMs for weight loss, HUB is here to help you construct the right mix of benefit offerings to maximize your cost-avoidance and keep your employees happy and healthy.
1 Centers for Disease Control and Prevention, “About Obesity,” January 23, 2024.
2 National Institute of Health, “Association of body mass index with health care expenditures in the United States by age and sex,” March 24, 2021.
3 Forbes, “GLP-1 Agonists for Weight Loss: What You Need to Know,” updated September 25, 2023.
4 Journal of Managed Care & Specialty Pharmacy, “Real-world persistence and adherence to glucagon-like peptide-1 receptor agonists among obese commercially insured adults without diabetes,” May 8, 2024.
5 NBC News, “Beyond Ozempic: New GLP-1 drugs promise weight loss and health benefits,” June 23, 2024.
6 The New England Journal of Medicine, “Tirzepatide for Metabolic Dysfunction-Associated Steatohepatitis with Liver Fibrosis,” June 8, 2024.
7 The New England Journal of Medicine, “Tirzepatide for the Treatment of Obstructive Sleep Apnea and Obesity,” June 21, 2024.
8 The Lancet, “Exenatide once weekly versus placebo in Parkinson’s disease: a randomised, double-blind, placebo-controlled trial,” August 3, 2017.
9 National Institute of Health, “Glucagon-like peptide-1 receptor agonist, liraglutide, reduces heroin self-administration and drug-induced reinstatement of heroin-seeking behaviour in rats,” November 21, 2021.
Are you considering adding GLP-1s to your benefits plan? HUB can help you understand the financial implications.
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Employee Health Plans and Weight Loss Drug Coverage: FAQs for Employers
Yes, employers can choose to cover GLP-1 medications, like Wegovy®, Zepbound®or Saxenda®, through their employee benefits plans for weight management. Coverage decisions for GLP-1 medications in employer-sponsored prescription drug plans depend on the pharmacy benefit manager (PBM) and insurance carrier your organization partners with, as well as your plan design and budget. Many employers are now considering adding GLP-1 coverage as demand grows for clinically proven weight loss medications in employee wellness strategies. Working with your benefits consultant can help you evaluate coverage, understand costs and design a plan that aligns with your workforce’s needs.
When adding GLP-1 medications like Wegovy®, Zepbound® or Saxenda® to your employer-sponsored prescription drug plan, employers should weigh factors like cost impact, expected demand for weight loss drugs, clinical guidelines for eligibility and plan design options. It’s important to define clear criteria for covering GLP-1 weight loss drugs, such as BMI thresholds or obesity-related conditions, to manage overall costs and ensure appropriate use. Also, consider how offering weight loss medications fits with your organization’s wellness strategy and long-term employee health goals. Consulting with your benefits advisor can help you create a plan that balances affordability with meaningful support for employees seeking weight management solutions.
Currently, most employer-sponsored health plans do not cover GLP-1 weight loss medications like Wegovy®, Zepbound® or Saxenda® by default. They do cover GLP-1 medications for diabetes. However, interest is growing as more employers recognize the link between obesity, chronic health conditions and overall healthcare costs. Some employers are starting to include access to weight loss drugs in employee benefits as part of broader wellness or disease management strategies to improve outcomes and reduce long-term expenses. Reviewing plan options and employee health data with a benefits consultant can help determine if adding coverage for weight management medications makes sense for your organization.
Employers typically work with their pharmacy benefit manager (PBM), insurance carrier and benefits consultant to review available GLP-1 weight loss drugs, their clinical effectiveness and potential costs. Decisions often involve evaluating FDA approvals, safety profiles of weight management medications and guidelines for appropriate use. Aligning the list of covered obesity medications with wellness goals and budget constraints helps employers create plans that support employee health without unnecessary expenses. Clear eligibility criteria, like BMI thresholds or obesity-related health conditions, and medical management can also help manage costs and ensure equitable access.
Most health plans that cover GLP-1 medications like Wegovy® or Zepbound require prior authorization for GLP-1 drugs, however this can vary between plans. This process ensures the medication is used appropriately according to plan criteria, such as BMI requirements or qualifying obesity-related conditions, and helps control costs within employer-sponsored weight loss medication benefits. Prior authorization supports proper use of weight management treatments and minimizes unnecessary spending. Working with your benefits consultant can simplify the process and help employees understand what documentation is needed to secure coverage for GLP-1 weight loss medications.
No, employers are not legally required under the Affordable Care Act (ACA) to cover weight loss medications like GLP-1 drugs in their health insurance plans. While the ACA mandates coverage for certain preventive services, prescription drugs for weight management and obesity treatment are not among them. However, employers can choose to add GLP-1 medications to employee benefits plans as part of broader wellness strategies to support employees struggling with obesity and related health conditions. Exploring coverage options for weight loss drugs with your benefits consultant can help align your benefits plan with your organization’s overall health goals.
Some states have considered mandating GLP-1 coverage for weight loss, but to date, these measures have not been enacted.
Currently, there are no federal laws requiring employers to cover weight loss medications like GLP-1 drugs, so excluding them from an employee benefits plan does not create a direct compliance violation under laws like the ACA or ERISA. However, employers should consider whether their weight loss drug coverage decisions align with their culture, wellness, diversity, equity and inclusion (DEI) goals and ensure consistent, nondiscriminatory application of plan eligibility criteria. Reviewing exclusions for obesity medications with legal and benefits advisors can help confirm compliance and minimize risks while balancing plan costs and employee needs. Mid-year plan changes to reduce or eliminate coverage for GLP-1 medications for weight loss should be approached with caution given the potential conflict with the HIPAA nondiscrimination rules.
Generally, excluding GLP-1 weight loss drugs from a health plan does not, by itself, violate the Americans with Disabilities Act (ADA). Employers have discretion over which weight loss medications and weight management treatments to include in their employee benefits. However, if obesity is considered a disability in a specific case, and coverage decisions for GLP-1 medications are applied inconsistently or discriminatorily, there could be risk of an ADA claim. Working closely with legal and benefits advisors ensures plan designs and communications around weight loss drug coverage are fair, consistent and comply with ADA requirements.