Weight loss medications, particularly GLP-1 drugs, have surged in popularity among employees with job-based health insurance. While these medications—used to treat diabetes, obesity, and other conditions—offer significant benefits for weight management, their high costs are straining employer budgets, prompting some large firms to reconsider coverage.
According to the latest Employer Health Benefits Survey from the Kaiser Family Foundation (KFF), the proportion of very large employers (with more than 5,000 workers) covering GLP-1 drugs for obesity jumped from 28% last year to 43% this year. In contrast, firms with 200 to 999 employees show no change, with only 16% offering coverage.
GLP-1 medications like Wegovy, priced around $1,350 per month, have been in high demand since their launch. Although employers commonly cover these drugs for diabetes, fewer cover them for weight loss due to the significant expense. Nevertheless, many companies recognize the benefit as a tool to attract and retain talent. Even among firms that do not provide coverage, nearly half consider it “very important” or “important” for employee satisfaction. Currently, over 36 million Americans with employer-based insurance have a body mass index that qualifies them medically for GLP-1 treatment.
“Large employers know these new high-priced weight-loss drugs are an important benefit for their workers, but their costs often exceed their expectations,” said Gary Claxton, senior vice president at KFF.
The survey revealed that costs have outpaced forecasts as more employees take advantage of the benefit. Nearly 60% of large firms reported higher-than-expected usage, and two-thirds said the impact on prescription spending was “significant.” One employer reported that GLP-1 medications topped their spending list this year, jumping from 32nd place the previous year.
A large retailer told KFF, “Before we knew it, we spent half a million dollars, and we’re projected to go up to $1.2 million next year.”
The rising cost of GLP-1 drugs has been a broader concern in the U.S. market. Last week, President Donald Trump suggested these medications could soon be available at $150, prompting intervention by CMS Administrator Mehmet Oz, who confirmed that price negotiations are ongoing.
Some companies are now implementing strategies to manage costs, such as limiting coverage to employees with higher BMI or requiring participation in weight management programs. “You have to have a coach, and then you can only stay on it for a certain period before reevaluation,” one large manufacturer said. Others have chosen to drop coverage entirely for weight-loss purposes.
However, analysts suggest employers may need to revisit coverage again in the coming years as demand grows and the medications are approved for additional conditions—especially if prices decrease. “We’re still writing the story of what GLP-1 coverage looks like in employer plans,” said Matthew Rae, associate director of KFF’s Program on the Health Care Marketplace.
High prescription costs, including GLP-1 medications, are also contributing to rising premiums. KFF reports that the average annual family health insurance premium has reached $27,000, up 6% from 2024, with employees paying $6,850 and employers covering the rest. Individual coverage averages $9,300, up 5%, with workers contributing $1,440.
Looking ahead to 2026, consulting firms anticipate potentially higher premiums due to GLP-1 drug costs, hospital pricing, and tariffs. Drew Altman, CEO of KFF, noted, “There is a quiet alarm bell going off. Employers have few tools to manage the drivers of cost increases, which may result in higher deductibles and employee cost-sharing—a strategy no one favors but often becomes necessary to keep premiums in check.”