Employers Grapple With GLP-1 Coverage for Weight Loss

Quick Hits

• Generally, employers aren’t required to cover weight loss drugs in their health plans.
• More employers are voluntarily covering weight loss medications to recruit and retain talent.
• Demand for weight loss drugs is growing among workers.

The medications are expensive—typically about $617 to $766 per month, according to the Employee Benefits Research Institute. In most cases, employers are not legally required to cover GLP-1 drugs in their health plans. About 23 percent of U.S. employers said they covered GLP-1 drugs for diabetes or weight loss in 2025, according to a survey from the Society for Human Resource Management (SHRM).

Some employers are trying medical management techniques that require individuals to obtain prior authorizations, meet a body-mass index threshold, or participate in a weight-management program before the drugs are covered. And some plans place GLP-1s in a higher tier of the pharmacy formulary with a higher out-of-pocket cost for the patient.

Employers are weighing the cost of these medications against the long-term costs of obesity. For example, over ten or fifteen years, an individual with unaddressed obesity could accumulate a lot of medical expenses related to diabetes, heart disease, sleep apnea, or knee replacement surgery. Avoiding those conditions could produce important savings for businesses.

Coverage for GLP-1s for weight loss is not required under the federal Employee Retirement Income Security Act (ERISA). States could add requirements to their insurance laws, meaning that fully insured employers would be required to offer the coverage.

About 19 percent of companies with 200 or more workers, and 43 percent of firms with 5,000 or more workers, covered GLP-1 drugs for weight loss in their largest health plan in 2025, according to research from the Peterson Center on Healthcare and the Kaiser Family Foundation (KFF).

Using HRAs

Employers that want to avoid covering GLP-1s for weight loss in their general health plans could provide a health reimbursement account (HRA), using pre-tax dollars, to cover a portion of the cost of these medications. Employees would submit claims and proof of payment for eligible expenses, which are then reimbursed from the HRA. With annual maximums fixed, these plan designs can offer greater cost protection for employers.

The HRA could be integrated into the employer-sponsored health plan, or it could be an excepted benefit HRA, covering certain medical expenses for employees who aren’t enrolled in the health plan. Eligibility may require a prescription for an underlying medical condition, like diabetes, or a letter of medical necessity, depending on rules set by the employer. Another option for employers is to provide an HRA contribution incentive for employees who participate in weight loss programs.

An employer cannot offer both a group health plan and an integrated HRA to the same group of employees. The employer must define classes of employees–such as seasonal, part-time, and full-time—and apply benefit terms consistently within each class. An employer cannot discriminate in favor of highly compensated employees if the HRA is a group health plan subject to nondiscrimination rules under the Internal Revenue Code (IRC) Section 105(h). That rule applies when the HRA is self-funded and reimburses medical expenses beyond insurance premiums.

If an HRA is integrated with a group health plan that does not meet the “minimum value” standard, then the HRA can only reimburse certain items, such as copayments, coinsurance, deductibles, premiums, and medical care that is not considered essential health benefits. If the HRA is integrated with a group health plan that does provide the minimum value, paying at least 60 percent of costs, then the HRA may reimburse any medical expenses.

With an excepted benefit HRA, an employer must offer a traditional group health plan to the same class of employees who are eligible for the excepted benefit HRA. However, the employee is not required to enroll in the group health plan to receive the excepted benefit HRA. The same benefit terms must apply to all similarly situated individuals in a class of employees.

An excepted benefit HRA—which could be up to $2,200 in 2026—must stand alone and not be an integral part of the group health plan. An excepted benefit HRA generally cannot reimburse premiums for individual or group health insurance. It can reimburse copays, coinsurance, deductibles, COBRA premiums, and standalone vision and dental premiums.

Employee Demand

One of the primary reasons employers decide to cover GLP-1s for weight loss is to boost recruiting and retention. High cost continues to drive employee demand for this coverage. During open enrollment season, workers could look to GLP-1 coverage to determine what plan to enroll in.

Most of the weight loss drugs on the market are injectables, but at least one drugmaker currently markets a GLP-1 drug in pill form. That could drive up demand if some patients who won’t take daily injections seek to take the pill instead.

The proportion of U.S. adults classified as obese (with body-mass index of thirty or greater) increased from 40 percent in 2010 to 45 percent in 2024, according to an analysis from Epic Research.

Next Steps

States may pass laws requiring this coverage for insured plans, but for now employers that voluntarily cover GLP-1 drugs may wish to track the number of employees using the benefit and the annual cost. They also may wish to analyze how much obesity, diabetes, and heart disease contribute to their health care costs each year.

Along with drug coverage, employers can offer benefits like wellness programs, gym memberships, health coaching, exercise classes, or wearable fitness trackers to encourage employees to maintain a healthy weight.

Ogletree Deakins will continue to monitor developments and will provide updates on the Employee Benefits and Executive Compensation and Healthcare blogs as new information becomes available.

Timothy Stanton is a shareholder in the Chicago office of Ogletree Deakins.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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