Balancing high costs, rising demand, and long-term outcomes in employee health benefits

GLP-1 medications, once used exclusively to treat type 2 diabetes, are now making waves as powerful weight-loss drugs, changing the landscape of employer-sponsored healthcare. Drugs like Ozempic, Wegovy, and Mounjaro have exploded in popularity, largely due to their effectiveness in managing both blood sugar and weight-related conditions. But with this rising demand comes a significant question for employers: should these high-cost medications be covered under group health plans?

It’s a complex question. Employers must weigh employee expectations and wellness goals against staggering costs, regulatory uncertainty, and the need for long-term strategic planning.

The Financial Weight of GLP-1 Coverage

One of the most immediate challenges is the sheer cost of GLP-1 medications. These drugs typically range from $700 to $1,400 per month per user, and with more employees requesting access, budgets are being stretched thin. For large, self-insured employers, even covering a small percentage of eligible employees can represent millions in added annual expenses.

Beyond direct medication costs, employers must also consider:

• Increased utilization: Once one employee gains access, word spreads quickly.
• Off-label usage: Many GLP-1s are prescribed for weight loss rather than diabetes, raising questions about medical necessity.
• Insurance carrier strategies: Payors are all over the map, with some tightening access and others expanding it.

Wellness Outcomes vs. Short-Term Costs

Despite the financial and legal hurdles, GLP-1 drugs have shown real promise in improving employee health. Studies suggest these medications can lead to sustained weight loss, improved blood pressure, and reduced risk for cardiovascular disease—outcomes that could translate into fewer sick days, greater productivity, and long-term cost savings.

Employers who take a long view may consider:

• Tying access to structured wellness programs or lifestyle coaching
• Requiring clinical criteria for approval (e.g., BMI thresholds or a diabetes diagnosis)
• Offering tiered coverage or utilization management tools to control use responsibly

According to New City Insurance, some companies are already implementing innovative, cost-containment strategies such as value-based reimbursement, prior authorization, and step therapy.

Finding the Right Fit for Your Workforce

At RMC Group, we understand that weighing the options on GLP-1 coverage isn't just about numbers—it's about people. It’s about your employees’ health, your business’s sustainability, and your ability to attract and retain talent in a competitive market.

Whether you’re ready to offer GLP-1 benefits or just beginning to explore the possibility, RMC Group brings experience and perspective to help you make confident, informed decisions regarding your employee benefits.

As GLP-1 medications reshape the future of chronic care and wellness, employers face tough choices. There’s no one-size-fits-all approach—but there is a smarter way to navigate the complexity. Contact RMC Group today to discuss your options as an employer. Our office can be reached at 239-298-8210 or contact us here.

For more information, listen to our podcast here with RMC’s VP of Health and Benefits, Sue Nelson, about The Future of Prescription Drugs.