A growing number of employers are considering covering anti-obesity medications like Wegovy during open enrollment this month. These GLP-1 drugs, which are used to treat diabetes, obesity, and other conditions, have become popular for their weight-loss benefits. However, due to their high prices, coverage for weight loss specifically has been limited. Nearly 40 million people with employer coverage are estimated to be eligible for these medications, which can have an impact on premiums due to their cost.
Employers, especially larger organizations, are more likely to offer coverage for anti-obesity drugs. Reports from the Business Group on Health, Mercer, and KFF show varying levels of coverage among different sized companies. While more employers are adding coverage for these medications, many also implement restrictions such as prior authorization requirements or participation in weight management programs. This allows companies to target coverage to those who need it most and will benefit the most.
However, providing coverage for anti-obesity drugs can be difficult and costly for some companies. Benefits managers have to navigate rising prescription drug costs and overall health care expenses when considering adding benefits like coverage for weight loss medications. Some companies have had to implement restrictions such as requiring a diabetes diagnosis for coverage in order to control costs and prevent abuse of the benefit.
The cost of health benefits continues to rise, with family health insurance premiums reaching nearly $25,600 this year. Employees are responsible for a portion of the premium, but the overall cost is shared between the employer and employee. Health care costs are expected to continue increasing in 2025, with rises in prescription drug expenses and overall health care prices contributing to the increase. Employers are considering cost-cutting measures such as raising deductibles and increasing out-of-pocket costs to mitigate the impact of rising health care expenses.
Employers are also looking at ways to rein in spending on prescription drugs. Adjustments to preferred brand name medicines covered and the use of biosimilars, which are typically less expensive, are being considered as cost-saving measures. However, some employers are concerned about passing on additional health care costs to their workers, as this can impact employee retention and competitiveness in the labor market. Companies like Marroquin Industries Corp are absorbing premium increases to avoid shifting costs onto their employees and maintain benefits.
Overall, the landscape of employer-provided health benefits is evolving as companies grapple with rising health care costs. The decision to cover anti-obesity medications is just one aspect of this complex issue, as employers weigh the financial implications of providing these benefits against the need to control costs and provide competitive benefits to retain and attract employees.
