Covering GLP-1s for Obesity: Key Considerations for Employers

Published in All Insurance Industry Insights on Monday, September 29, 2025 by John Monaghan

As employers prepare for 2026 benefits planning, GLP-1 medications like semaglutide and tirzepatide are becoming a major topic of discussion. These drugs are showing real promise in treating obesity and improving related health conditions. But at a cost of $1,200 to $1,500 per month per patient, offering them as a covered benefit brings financial challenges.

This article takes a closer look at the clinical value of GLP-1s and what employers should consider when deciding whether to include them in their health plans.

Clinical Benefits

GLP-1s have shown strong results in clinical trials, with patients losing 15 to 20 percent of their body weight on average. This level of weight loss can significantly reduce the risk of several chronic conditions:

Chronic Disease Management: Improved outcomes for diabetes, high blood pressure, sleep apnea, and heart disease
Lower Health Costs: Just a 5 percent reduction in weight can lead to meaningful cost savings
Heart Health: Fewer major cardiovascular events and related claims

These clinical wins make a strong case for coverage, especially for populations with high obesity rates. Still, cost remains a hurdle.

Cost and Coverage Challenges:

Right now, most fully insured plans do not cover GLP-1s for weight loss. Self-funded employers have more flexibility, but most are holding off due to cost concerns and uncertain long-term ROI. Broadly adding these drugs to benefit plans could raise total healthcare spending by as much as 20 to 30 percent.

What's ahead:

There is hope that costs will come down. More competition is entering the market, and Victoza, one of the earlier GLP-1 drugs, is expected to become available in a lower-cost biosimilar version soon—possibly dropping the monthly price to under $300.

As prices drop and more data becomes available, we expect to see more movement from both carriers and self-funded employers.

What Employers Can Do Now:

Understand Your Population: Look at obesity-related conditions within your workforce. This helps estimate potential impact.
Model the Cost: Work with your advisor to run projections based on expected use and explore cost-control options like step therapy or prior authorization.
Track Market Trends: Keep an eye on FDA approvals, new entrants, and price changes.
Connect to Wellness: GLP-1s work best when paired with lifestyle support, coaching, or disease management programs.
Talk to Carriers and PBMs: See what options exist today for coverage, pilot programs, or negotiated pricing.

Final Thoughts:

GLP-1s are reshaping the conversation around obesity care. While costs are still high, this may change in the near future. Employers who take time now to evaluate their population health data and stay informed will be better prepared to make smart benefit decisions moving forward.

We’re here to support you as you navigate these important decisions for your workforce’s health and well-being. If you have questions or want to discuss how GLP-1 coverage might fit into your benefits strategy, please don’t hesitate to reach out. Together, we can find the best path forward for your organization and employees.

For more information or help navigating this topic, contact John at jmonaghan@pdcm.com.

Written by
John Monaghan