Employers Covering GLP-1 Drugs in Health Plans Could Nearly Double in 2024
Nov 03, 2023
As the buzz grows around using GLP-1 drugs such as Ozempic
and Wegovy as a tool to help shed pounds, more HR leaders say they plan to
cover the drugs for their employees.
Forty-three percent of
employers plan to cover the weight loss drugs in 2024, nearly double the share
of employers that cover them now (25 percent), according to newly released
survey findings from Accolade, a health care firm.
The survey of 500
employers found that most human resource decision-makers are open to adding
GLP-1 medications to their benefits package, with 81 percent reporting that
their employees would be interested in GLP-1 medications.
The anticipated spike is
likely the result of high interest among employees, as well as potential boons
to employers in terms of healthier workers. Providing access to the medications
could also be a recruitment and retention tool, said James Wantuck, M.D.,
associate chief medical officer at Accolade.
"With the recent
spike in demand surrounding these medications, HR decision-makers feel it will
create a better health insurance package overall for employees, as well as
boost their mental and physical health long-term," he said, noting that
more than two-thirds of companies that added GLP-1s to their health care
offerings experienced an increase in enrollment.
"For companies who
are already offering this medication as part of their benefits, they've also
seen higher employee satisfaction as a result," Wantuck said.
Nearly all (99 percent)
of the employers that are covering GLP-1 drugs plan to keep covering them next
year, the survey found.
The Accolade survey
findings are significant, as they are among the first to gauge HR leaders'
plans on offering the drugs.
Earlier this year, experts told SHRM Online employers
were beginning to consider if they should cover the drugs for weight loss for
their employees. The experts said although employees were expressing interest
in the drugs, it was too early to tell what organizations would do, especially
given the high costs of the medications as well as the fact that some of the
drugs haven't been approved officially for weight loss.
Ozempic, for instance, is
only approved for treatment of Type 2 diabetes, and employers primarily cover
the drug for that diagnosis. Wegovy is also a diabetes medication, but it was
approved by the U.S. Food and Drug Administration (FDA) for chronic weight
management in 2021. Meanwhile, drugmaker Eli Lilly is seeking FDA approval for
use of Mounjaro, another anti-diabetes medication administered weekly through
injections, for the treatment of adults with obesity or those who are
overweight and have weight-related comorbidities.
Employers Acknowledge Health Benefits
Employers might be
persuaded to cover the drugs to get their employees healthier, the data
indicates.
The Accolade survey, for
instance, finds that three-fourths of HR decision-makers said GLP-1 medications
are beneficial for controlling blood sugar, boosting weight loss, improving
blood pressure and lowering the risk of heart disease.
"New studies come
out every day that show the profound health benefits from losing a significant
amount of weight," Wantuck said. "As scientific evidence mounts and
novel medications in this class are approved, it will be harder and harder to
justify noncoverage."
Helping control workers'
weight could not only keep employees healthier and more productive, but also
save on health care costs for the organization. Obesity is a significant
contributor to company pocketbooks: A quarter of U.S. employers said obesity
has the largest impact on overall health care costs, according to 2022 data
from the International Foundation of Employee Benefit Plans (IFEBP).
Julie Stich, vice
president of content at IFEBP, said in June that employer efforts to address
weight loss are becoming more accepted.
"If the employer
wants to help manage weight, that might make a positive impact on some of the
resulting health conditions," Stich said. "In the workplace, we
should get beyond any stigma surrounding weight and look to provide support,
solutions and understanding. We should look at it when we talk about
whole-person well-being."
Cost Barriers
Although the survey finds
potential big momentum for the drugs, cost is still a concern.
Thirty-eight percent of
HR leaders surveyed by Accolade cited the costs associated with GLP-1s as a
potential barrier to providing coverage, while another recent survey by Virta
found that the high costs of GLP-1s, driven by an anticipated rise in utilization,
are a concern for the vast majority (72 percent) of health plan leaders.
That's for good reason:
Drugs such as Ozempic cost more than $1,000 per month on average. And a
significant number of employees may want to use the drug, which would
substantially hike drug costs for employers. Plus, the drugs are not designed
for short-term use. Studies show the weight will stay off only on continuation
of the drugs, pointing to a long-term commitment for employers—and a much
higher price tag.
But with increased employee
interest, Wantuck said more employees are "going to expect and demand that
their employers cover these impactful medications."
"For some employers
this will overshadow the high costs associated with this medication—a barrier
for many employers considering it," he said. "We expect that demand
for GLP-1s will only increase in years to come, and there aren't any signs of
it slowing down."
Source: SHRM