The popularity of weight loss drugs has reached a fever pitch in the United States. This trend has made its way into theworkplace, with employees increasingly asking their employers about coverage for popular drugs used for weight loss, such asWegovy. Other drugs intended to treat Type 2 diabetes, such as Ozempic or Mounjaro, are also in high demand for off-labelweight-loss use. As a result, employers are presented with the decision of whether to cover these expensive drugs or facepotential negative attraction and retention repercussions in the coming years, if not already.

This article provides a general overview of popular weight loss drugs and explores what employers should know about them.

How Obesity Impacts the Workplace

Obesity is a chronic disease that impacts more than 4 in 10 American adults, according to the Centers for Disease Control andPrevention (CDC). By 2030, nearly half of U.S. adults are expected to be obese. According to the CDC, in 2019, medical costs foradults with obesity were, on average, $1,861 higher than for adults with a healthy weight. The annual medical cost of obesity inthe United States was $173 billion in 2019.

Nearly a quarter of U.S. employers say employee obesity has the largest impact on overall health costs, according toInternational Foundation of Employee Benefits Plans (IFEBP) survey data of more than 500 organizations. Employers havetraditionally approached weight loss by promoting or even sponsoring physical wellness initiatives, including weight losschallenges, daily step competitions and biometric screenings. Addressing obesity helps individuals avoid more expensivemedical treatments and can prevent the development of chronic conditions. Because of this and employees’ recent demandsfor weight loss drugs, many employers are searching for new approaches to help employees instead of simply paying for gymmemberships, offering wellness programs or organizing weight loss competitions. By supporting efforts to lose weight andcombat obesity, employers can help employees improve their overall health and reduce their odds of developing other relatedhealth conditions, such as Type 2 diabetes and high blood pressure. This can help keep employees healthier and moreproductive, which can also help employers lower their overall health care costs and improve their bottom line.

Overview of Popular Weight Loss Drugs

The recent string of popular weight loss drugs are types of glucagon-like peptide 1 (GLP-1) receptor agonists—medicationsoriginally prescribed to treat diabetes but have been shown to be effective in helping individuals to lose weight. These drugscan potentially transform the health of millions of Americans by decreasing their weight by as much as 15%; this may helptreat and address several weight-related conditions, including heart conditions, diabetes and musculoskeletal issues.

These drugs work by lowering an individual’s blood sugar levels. While GLP-1 drugs have not been extensively tested onindividuals with obesity, they have the side effect of sending fullness signals to the brain, which produces an anti-appetiteeffect leading to weight loss. However, individuals may need to take these drugs indefinitely to maintain any weight lossbenefits. Other side effects include nausea, vomiting and diarrhea.

While GLP-1 drugs like Ozempic and Mounjaro are currently only approved to treat diabetes, Wegovy was approved by theU.S. Food and Drug Administration (FDA) in 2021 to treat chronic weight management in addition to diabetes. AlthoughOzempic is not FDA-approved for weight loss usage, some health care providers have prescribed it to individuals who havedifficulty losing weight through traditional means (e.g., diet). As of this writing, pharmaceutical company Eli Lilly is seeking FDAapproval to use Mounjaro to treat obesity. On average, GLP-1 treatment costs more than $1,000 per individual each month.

While most private health insurance doesn’t cover these obesity drugs, nearly 130 million adults would be eligible for GLP-1sbecause of their weight and other health conditions if they were covered (e.g., individuals with a body mass index [BMI]greater than 30 or those with a BMI greater than 27 and weight-related comorbidity), according to Bloomberg. Only 10 stateMedicaid programs currently provide coverage for obesity drugs, with eight additional states considering changes to coverthese drugs. Medicare does not cover weight loss drugs.

Considerations for Weight Loss Drugs

Employers have traditionally not covered weight loss drugs. Data from the IFEBP revealed that only 22% of employers coverprescription weight loss drugs, although the percentage is higher for employers with 5,000 or more employees. In comparison,45% of employers surveyed cover bariatric surgery and 32% cover weight management programs.

However, increased demand from workers and obesity concerns among U.S. adults are forcing employers to considercomprehensive obesity care benefits, including offering weight loss drugs. A recent survey from Ro and the Obesity ActionCoalition revealed that 51% of workers with obesity would stay in a job they didn’t like if they received obesity treatmentcoverage, and 44% would change jobs to obtain coverage for obesity treatment. Therefore, while weight loss drugs may beextremely costly, they may help strengthen employers’ attraction and retention efforts.

Employers should consider the following when deciding whether to cover weight loss drugs.

**Expensive Treatments**

Prescription drugs typically drive a large percentage of an organization’s health care spending. Adding weight loss drugs to ahealth plan would likely substantially increase an employer’s health care expenses, especially since using drugs like Ozempic tomanage weight loss is extremely expensive. Deciding to cover weight loss drugs may result in employers seeing significantspikes in their health care costs, especially if multiple employees receive the drugs to lose or manage their weight. For someemployers, these costs may prove too difficult to absorb.

Prescription drugs typically drive a large percentage of an organization’s health care spending. Adding weight loss drugs to ahealth plan would likely substantially increase an employer’s health care expenses, especially since using drugs like Ozempic tomanage weight loss is extremely expensive. Deciding to cover weight loss drugs may result in employers seeing significantspikes in their health care costs, especially if multiple employees receive the drugs to lose or manage their weight. For someemployers, these costs may prove too difficult to absorb.

Drug Design

GLP-1 drugs were not originally designed to treat weight loss. In situations where individuals use them for this purpose, theymay not be effective over the long term if used for a short period of time. Therefore, employers who cover these treatments totreat weight loss may be required to make a sustained commitment for employees to experience weight loss benefits; as aresult, they’re likely to incur significantly higher health care costs. Employers may also want to consider these drugs’ possibleside effects and the fact that they are relatively new.

Health Plan Coverage

Because most GLP-1 drugs aren’t FDA approved for weight loss, most insurers will not cover them when used for that purpose.If they are not covered by health insurance, workers must pay out of pocket to use the drugs for weight loss. Further, mosthealth care professionals will not prescribe these drugs for weight loss unless an individual is obese—meaning they have a BMIof 30 or more—and has difficulty losing weight using traditional methods. Some health care providers may prescribe GLP-1drugs to individuals with obesity if they also have weight-related health conditions, such as high blood pressure. Moreover,even if an individual obtains coverage of a GLP-1 drug for weight-related treatment, it does not guarantee permanentcoverage for this purpose, which could negate any weight-related benefits if they lose coverage in the future.

Prerequisites, Limits and Alternatives

As more employees ask their employers to cover these drugs, some organizations are requiring employees to participate inlifestyle modification programs as a prerequisite for coverage, while others are asking employees to participate voluntarily.According to a recent survey of over 150 employers and health by pharmacy benefit consulting company PharmaceuticalStrategies Group, 22% of employers who cover FDA-approved weight loss drugs require employees to participate in a lifestylemodification program in order to be eligible for the drugs. For 20% of employers, participation in such programs is voluntary.Additionally, some employers are placing limits on coverage of weight loss medications in terms of either dollars or durationof treatment.

Some employers are exploring alternative approaches to providing weight loss benefits to employees, including coveringpsychology-based weight loss programs like Noom to support employees in losing weight. In some cases, these programsoffer prescriptions for obesity drugs, like Wegovy, for approximately $120 per month, as well as cheaper weight lossmedications that can help reduce food cravings.

What Can Employers Do?

Since using GLP-1 drugs for weight loss is relatively new, there’s uncertainty surrounding their effectiveness for weight loss and management. As a result, some employers are adopting a wait-and-see approach before covering these drugs. Other employers have decided to permit lower-cost weight loss drugs before covering GLP-1 drugs.

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Organizations can also consider alternatives to covering GLP-1 drugs. For example, weight loss programs can be an effectiveand affordable alternative to GLP-1 drugs. These programs can change individuals’ behavior to help workers develop lastinghealthy habits and provide personalized weight loss coaching

Summary

Many employers still consider weight loss a lifestyle problem instead of a health issue. As a result, they don’t believe weightloss drugs are medically necessary. However, as employee attitudes and demands shift, some employers may be unable toavoid a more deliberate approach to employee obesity. While it’s still uncertain whether GLP-1 drugs are effective in treatingobesity, employers should monitor any developments closely and find ways to holistically improve employee wellness.

Reach out to AscendPBM for health care resources.

What Employers Should Know About Popular Weight Loss Drugs