Your employer may soon start covering weight loss drugs CNN Business

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Hoping your company will start paying for anti-obesity drugs like Wegovy? You may be lucky.

A growing number of employers are considering covering weight loss drugs, several studies show. Employees will learn whether they will receive such coverage for next year during open enrollment, which begins this month at many companies.

GLP-1 drugs, which treat diabetes, obesity and other conditions, have become increasingly popular since they hit the market a few years ago because they help patients lose weight . While employers often cover diabetes medications, few do so for weight loss, in part because of the drug’s high cost — which also limits access to Americans to them.

Wegovy’s list price, for example, is about $1,350 for a four-week supply. About 40 million people with employer coverage are estimated to be prescribed anti-obesity drugs based on their weight, according to KFF, a health research organization.

“It can have a big impact on the cost of prescriptions depending on the price of the drug,” said Matthew Rae, director of KFF’s Health Care Marketing Program.

However, more than a quarter of employers are considering increasing coverage for GLP-1 weight loss drugs in 2025 or 2026, according to a national survey conducted this year by Mercer. human resources consulting firm.

About the same proportion say they are likely to want or may begin covering these medications for weight loss within the next 12 months, according to KFF’s annual Employer Health Benefits Survey. .

The likelihood that your employer will cover an anti-obesity drug depends on its size – larger organizations are more likely to offer the benefit than smaller ones.

Employees should be given GLP-1 medication for the treatment of obesity in 67% of large companies in the Business Group on Health’s 2024 Report, which surveyed companies with more than 10,000 employees.

The Mercer report, which looked at employers with at least 500 employees, found that just over half offered such coverage this year. But only 18% of the firms in the KFF survey, which includes those with 200 or more employees, cover GLP-1 drugs mainly for weight loss.

Even employers that provide coverage for anti-obesity drugs often have safeguards in place, such as requiring employees to obtain prior authorization or try other weight loss methods first. Some have higher body mass index values ​​than the Food and Drug Administration’s definition of at least 30 for adults or require employees to participate in weight management programs.

“While more employers are increasing efficiency, more employers are also increasing control over coverage to direct it to the people who need it most and will benefit the most,” said Beth Umland, director of research, health and benefits, at Mercer, found that 35% of employers in its 2023 survey had some type of coverage.

Although many employees lament the use of anti-obesity drugs, providing the benefit is too difficult or too expensive for some companies. A Mercer study found that 10% of employers who covered prescription drugs in 2024 were considering dropping coverage and 3% had recently stopped it or planned to do so.

Earlier this year, Eileen Pabon, who manages benefits and health for DSV Air & Sea US, was shocked to discover that the company’s medical costs had increased by $400,000 in a few months. He learned that several workers who did not have diabetes started using GLP-1 drugs. DSV, a global transportation company based in New Jersey, did not set any restrictions on its security.

So the firm, which provides health insurance to about 8,000 people, began requiring diabetes screening.

He said: “It would not be financially wise for us to cover it just for weight loss. “It will force us to raise the cost of health insurance for workers.”

The cost of family health insurance benefits at work has reached nearly $25,600 this year, up 7% from last year, according to KFF’s annual survey. This is the first time the total premium has crossed the $25,000 mark.

Employees were responsible for about $6,300 of that tab, while employers covered about $19,300.

Over the past five years, a 24% increase in family health insurance premiums has roughly matched a 23% increase in inflation and a 28% increase in workers’ wages, KFF found.

The average annual premium for a single coverage was nearly $9,000 this year, up 6% from last year. Employees paid about $1,370, while their employers received about $7,600.

Costs are expected to continue rising through 2025, due in part to rising drug costs and overall health care prices, according to research from several consulting firms. Costs in the health care sector are often a drag on the economy as a whole as insurers and providers often negotiate multi-year contracts.

Total health benefits costs per employee are expected to rise 5.8%, on average, by 2025, even after employers implement cost-cutting measures, according to Mercer. It is the third year in a row that costs have risen by at least 5%.

Due to the tight labor market, employers have been reluctant to push costs on their employees in recent years. But few can continue to absorb the costs, Mercer found. Another 53% said they would make cost-cutting changes to their plans — such as raising deductibles and increasing other out-of-pocket costs — by 2025, up from 44% this year.

Employers are also looking to spend more on prescription drugs, said Eric Miller, a consultant with Segal, a benefits consulting firm that works extensively with employers and large public organizations. Outpatient drug costs are expected to rise 11.4% next year, outpacing the 8% increase projected for medical plan costs, according to Segal’s latest research.

These changes include adjusting the list of preferred brand-name drugs and encouraging the use of biosimilars, which are often less expensive than complex biologic drugs, he said.

However, some employers are still concerned about making their employees pay more for health care. Take Marroquin Industries Corp in Hawthorne, California. The company, which provides an autonomous machine and manages and employs nine people, expects that its payments will increase between 5% and 8% for 2025, which is similar to the increase in prices in recent years.

Although employees will see their monthly premiums increase accordingly, Marroquin will not increase their premium share or raise their out-of-pocket or out-of-pocket costs, or reduce benefits. The company is worried about losing staff to bigger competitors, said Vicky Cathcart, Marroquin’s business manager.

Instead, it will have to raise the price of its products, as well as accept having a small profit.

“Basically, our customers are paying for it,” Cathcart said.