Glucagon-like peptide-1 medications have become one of the most discussed topics in employee benefits over the last several years. Originally developed to help manage Type 2 diabetes, these medications are now widely used for weight management, sleep apnea and other conditions, and are attracting significant attention from employers, employees and health insurance companies.
While GLP-1 medications may offer some health benefits for certain individuals when prescribed by and used under the guidance of a qualified health care provider, they also present new challenges for employer-sponsored health plans. Rising utilization, high prescription costs and uncertainty surrounding long-term treatment patterns are prompting employers to reevaluate many of their benefits strategies. As demand continues to grow, employers must balance employee expectations with responsible plan management.
What are GLP-1 medications?
Glucagon-like peptide-1 (GLP-1) receptor agonists are medications that mimic a naturally occurring hormone involved in regulating blood sugar levels, appetite and digestion. These medications work by helping the body release insulin when needed, slowing stomach emptying and increasing feelings of fullness.
GLP-1 medications were initially approved for the treatment of Type 2 diabetes. Some medications in this class have also received approval for sleep apnea and chronic weight management in certain individuals who meet clinical eligibility criteria.
The popularity of these medications has increased dramatically in recent years. According to a 2024 KFF Health Tracking Poll, approximately 12 percent of U.S. adults reported having used a GLP-1 medication, and six percent reported currently taking one. By late 2025, KFF reported that these figures had increased to 18 percent and 12 percent, respectively. This rapid adoption is creating new considerations for employers that sponsor group health plans.
Why This Matters for Employers
GLP-1 medications present both opportunities and challenges for group health plans. Employers must make some important decisions about coverage options, access and how these medications fit within their overall benefits strategy.
Changing Employee Expectations
As public awareness grows through physician recommendations, advertising, social media and news coverage, employees may increasingly expect access to GLP-1 medications through their employer-sponsored health plan. For employers, GLP-1 coverage decisions may influence employee perceptions of the organization’s commitment to health and well-being.
Employers that do not offer coverage may face questions about eligibility, affordability and alternative support resources. On the other hand, employers that do offer coverage must establish clear policies and communicate plan provisions effectively to help employees understand available benefits and requirements.
Benefit Costs and Strategies
Coverage decisions often require employers to balance employee experience, clinical appropriateness, plan sustainability and organizational goals. Employers may also want to evaluate whether wellness, care management or support programs should complement GLP-1 coverage.
Workforce Health Outcomes
One of the primary reasons employers are closely monitoring GLP-1 utilization is the potential effect these medications may have on long-term employee health outcomes. While research is ongoing and long-term data is still developing, many employers are interested in understanding how GLP-1 therapies may influence chronic disease management, workforce well-being and health care utilization over time.
Employer Health Care Cost Challenges with GLP-1s
While GLP-1 medications can offer important treatment options for certain individuals, coverage decisions can create complex financial and administrative considerations for employer-sponsored health plans. Key considerations include:
- Budgeting uncertainty. Unlike many other prescription medications, GLP-1 utilization trends are still evolving. Employers may face challenges forecasting future costs because questions remain about treatment duration, future utilization patterns and the potential expansion of approved uses.
- Rising pharmacy costs and treatment expenses. GLP-1 medications can significantly increase prescription drug spending, particularly for self-funded employers. Because annual treatment costs are often substantial, even moderate utilization by employees could create significant financial pressure and affect overall plan performance and pharmacy costs.
- Long-term treatment considerations. Many employers are closely monitoring how long participants remain on GLP-1s, whether employees discontinue treatment over time and how often individuals restart treatment after stopping. These and other factors can influence long-term cost projections.
- Growing eligibility and demand. As awareness increases, clinical guidelines evolve and additional indications are approved, the number of employees who may qualify for treatment could expand. This growth might increase demand for GLP-1 coverage and place additional pressure on group health plans.
Given these factors, many employers are trying to find the right balance between providing access to GLP-1 medications while also maintaining affordable and sustainable health benefits. As they evaluate all of their options, it’s important to consider both the immediate impact on benefit costs and the potential long-term effects on future health care spending.
Strategies to Control Costs for Employers
Employers do not necessarily need to choose between unrestricted coverage or complete exclusion of GLP-1s. Several strategies may help organizations manage costs while supporting employee health objectives. The best approach will depend on an organization’s workforce, budget and long-term benefits objectives.
Self-Funding and Custom Tiering
Self-funded plans can allow employers to move beyond an all-or-nothing coverage approach by balancing cost control with clinical oversight. Potential options include:
- Tiered formularies or prescription drug tiers
- Step therapy that requires trying a lower-cost medication first
- Limiting coverage to specific clinical indications
- Lifestyle program participation requirements
- Prior authorization requirements based on body mass index, comorbidities and previous interventions
These approaches may help employers better align coverage decisions with plan objectives and budget considerations.
Captive and Stop-Loss Layering
For self-funded employers, particularly those with fewer than 1,000 covered lives, increased utilization of GLP-1s can contribute to claims volatility and make benefit budgeting more challenging.
One strategy some employers use to help manage costs is participation in a benefits captive. A benefits captive is a risk-sharing arrangement in which multiple employers combine certain health plan risks into a larger pool. Depending on the captive’s structure, participating employers may be able to gain access to greater purchasing power, shared resources and more predictable funding arrangements than those that they could achieve independently.
Stop-loss coverage can provide an additional level of financial protection if claims exceed projected levels.
Claims Oversight and Mid-Year Corrections
Even well-designed plans can experience unnecessary spending if claims administration controls are not functioning as intended.
Claims auditing may help employers identify coding discrepancies, prior authorization failures, pharmacy benefit management issues, medical necessity compliance concerns and other issues. Regular claims reviews and pharmacy benefit audits, which may be able to be performed by your organization’s employee benefits broker, can help employers to monitor plan performance and make adjustments as needed.
Behavioral Health and Wellness Integration
Medication is often only one component of a broader approach to weight management and chronic disease treatment. Employers may be able to strengthen the value of their investment by integrating GLP-1 therapy with:
- Lifestyle coaching
- Corporate exercise programs
- Dietitian consultations
- Behavioral health support
- Virtual care programs
- Employee wellness initiatives
Data Analytics and Population Health Assessments
No workforce has the same risk profile or utilization patterns. Employers can work with their benefits advisor to analyze claims data and population health information to better understand the potential demand for GLP-1 medications.
Data-driven decision-making can help employers make more informed coverage decisions and budgeting assumptions. A few examples include:
- Evaluating prevalence of obesity and diabetes
- Identifying high-risk populations
- Monitoring GLP-1 utilization trends
- Forecasting future pharmacy spending
Education and Long-Term Planning
Employee education and long-term planning can play an important role in supporting workforce health and benefits sustainability. Clear benefits communications can help employees to understand eligibility requirements, prior authorization processes, coverage limitations, available wellness resources and other important aspects of their benefits.
Employers should also consider how they will support individuals on GLP-1s throughout their treatment journey. Many organizations focus on the cost of initiating therapy but spend less time planning for long-term support and post-treatment needs.
Beyond Medication: Importance of Population Health Strategies
While GLP-1 medications continue to receive significant attention, they represent only one component of a broader population health approach.
A comprehensive approach that aligns benefits, wellness programs and employee health resources can help organizations to address underlying health risks while improving the employee experience. Employers that understand their workforce, proactively manage risk factors and invest in preventive health initiatives may be better positioned to manage future health care costs.
Navigating the Future of GLP-1 Coverage
GLP-1 medications are creating new considerations for employer-sponsored health plans. Since every workforce has unique health needs and financial considerations, employers should regularly evaluate claims data, review plan performance and develop benefit and wellness strategies that align with their organizational goals.
Higginbotham’s employee benefits team helps employers evaluate pharmacy trends, assess plan options and develop data-driven strategies that support both workforce health and long-term cost management. Connect with one of our employee benefits consultants today to learn more.
