A growing number of employer-sponsored health insurance plans are covering weight-loss drugs like Ozempic and Wegovy, a development that could spike corporate health costs in the short term but drive down expenses over the longer term, an employee-benefits researcher said.

Employer coverage of glucagon-like peptide-1 drugs — initially intended for people with diabetes — is expanding: 55% of employers cover GLP-1s for diabetes and 36% cover them for both diabetes and weight loss, according to an October report from the Employee Benefit Research Institute. 

Bigger companies are more likely to pay for it. This year the largest plans of 43% of employers with more than 5,000 workers covered the cost of GLP-1 drugs for weight loss, a jump from 28% last year, according to data from the Peterson Center on Healthcare, a nonprofit that advocates for affordable healthcare and KFF, a healthy policy research organization.

That increase may create tension between a company's human resources and financial teams, with CFOs objecting to the coverage because of its costs but HR arguing that covering the drugs could attract potential employees plus create longer-term savings, Jake Spiegel, EBRI senior research associate, said in an interview. 

Concerns over the treatment of GLP-1s are arising as the cost of employer-sponsored health insurance continues to increase. Insurance premiums for families covered by employers reached an average of $26,993 in 2025, up 6% from 2024, according to KFF's 2025 annual benchmark health benefits survey of employers. The average co-pay is $6,850, the survey said.

Band-Aid

Spiegel and others wrote that GLP-1 drugs, originally developed to manage blood sugar levels but more recently prescribed for people wanting to lose weight, can cost up to about $700 or more for a typical monthly prescription, according to an October paper on EBRI analyzing the premium’s impact. Whether the employer or employee pays or shares that cost varies by company and typical treatments can last years.

"It could be that some employers are looking at this as sort of a longer game where you sort of rip the Band-Aid off, pay higher prices in the shorter term, but over a decade, two decades, you end up with a workforce that's incurring fewer obesity and overweight related expenses," he said.

Siegel said the EBRI paper could amplify discussions within companies concerning coverage of the drugs. "There definitely is some tension there. And I expect this paper to give some fuel to the CFO arguments because at this time these drugs are still incredibly expensive," he said.

'Demand is High'

Drew Altman, KFF president and chief executive officer, said in an Oct. 22 published commentary that providing coverage for the drugs represents a "cost challenge" to companies. "Demand is high and companies are getting skittish about continuing the coverage without more limitations," such as requiring prior authorization for prescriptions, enrollment in nutrition classes, and weight-loss sessions.

Spiegel said the chances exist for corporate health costs to escalate significantly because few employees now take the drugs. "If employers extend eligibility to folks who are not just obese or have diabetes, but also those who are simply overweight, the addressable market is potentially huge," Spiegel said.

For now, GLP-1 usage is relatively low with a 2024 survey finding only one in eight respondents having ever taken them, but over 40% of privately insured adults are “clinically eligible” for the drugs based on diagnoses of diabetes and weight or obesity issues along with other risk factors, according to EBRI.