PEO
GLP-1 Weight Loss Coverage Drops for First Time in Three Years
By Insurance Wire Staff, . Insurance Wire.
Employer coverage of GLP-1 medications for weight loss, drugs such as Ozempic and Wegovy that suppress appetite and have become widely prescribed in recent years, has dropped for the first time since they became a mainstream benefit. Insurance Business Magazine reported the figures from a WTW survey now in its 30th year, drawing on responses from 471 US employers with at least 100 employees and covering seven million workers in total.
What changed
Coverage for GLP-1s used specifically for weight loss slipped from 57% of employers to 53%. Cost was cited by 91% of those pulling back. Pharmacy spending now accounts for approximately a quarter of total employer healthcare expenditure, according to the survey, and is projected to rise 11.5% in 2026, up from 9% in 2025.
For context, the US Bureau of Labor Statistics reported that medical care prices overall rose just 1.5% in the year to September 2026. Pharmacy costs are running well ahead of that broader medical trend, which helps explain why benefit managers are treating drug spend as a category that needs its own response rather than a line item that will sort itself out.
The divide in coverage
SHRM reported that employers are increasingly willing to cover GLP-1s when prescribed for diabetes, while remaining reluctant to extend that same coverage to weight loss. Walmart's recent benefit decisions have drawn attention to this split: covering a drug for a diagnosed metabolic condition is a different actuarial calculation than covering it for weight management, where the eligible population is far larger and the duration of use is less predictable.
SHRM also noted that 14% of employers have already dropped GLP-1 weight loss coverage entirely, citing figures from the Business Group on Health.
The pressure building underneath
Employee Benefit News flagged that 49% of employers now say their healthcare programs will require significant changes within three years. The WTW survey put that figure at 34% in the prior period, a sharp move in a short time.
The practical implication is that finance teams are expected to take a more direct role in benefit design decisions that were previously left to HR. When pharmacy costs represent a quarter of total healthcare spend and are growing at double-digit rates, the numbers become large enough to attract executive attention.
For PEOs and employers managing benefits across large, varied workforces, the GLP-1 question is not simply whether to cover the drug. It is how to structure a benefit that limits open-ended cost exposure without creating a visible gap that affects recruiting. Covering GLP-1s for diabetes but not for weight loss is one approach; requiring prior authorization or step therapy, meaning a patient must try other treatments first, is another. Neither fully resolves the tension between cost control and employee expectations.
What to watch
The WTW data covers employers with at least 100 employees, so the picture for smaller employers, who often access coverage through PEO arrangements, may differ. What the current reporting does not establish is how PEOs are adjusting their master health plan designs in response to the same cost pressures, or whether the 53% coverage figure holds across employer sizes.
With pharmacy cost growth running at more than seven times the broader medical inflation rate, the direction of travel seems clear. The harder question is whether any benefit design change meaningfully slows utilization, or whether it simply shifts cost and friction onto employees.
Sources
1. Rising GLP-1 costs push employers to reconsider weight loss coverage, benefitnews.com
2. Employers turn on their PBMs as healthcare costs near a two-decade high, insurancebusinessmag.com
3. Walmart's GLP-1 Move Highlights the Divide in Employer Coverage, shrm.org
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