Hospital Chain Struggles to Cover GLP-1 Weight Loss Drugs Like Ozempic for Employee Health Plans

A major hospital chain struggled in 2024 to provide coverage for GLP-1 weight loss drugs like Ozempic under its employee health plans in the United States. The challenges stemmed from rising prescription drug costs and limited employer coverage, with only 19% of firms with 200 or more workers offering GLP-1 coverage for weight loss, according to a Kaiser Family Foundation survey.

Coverage was more common among the largest employers, with 43% of firms employing 5,000 or more workers expected to provide GLP-1 coverage for weight loss in 2025, up from 28% in 2024, the survey found. However, the rapid increase in utilization and associated costs has posed challenges for employers trying to balance coverage with budget constraints.

Only 19% of U.S. firms with 200 or more workers reported offering coverage for GLP-1 inhibitors such as Ozempic for weight loss in their largest health plans in 2024, according to a Kaiser Family Foundation (KFF) survey.

The rising cost of GLP-1 drugs has significantly impacted prescription drug spending. KFF data show that 64% of large firms reported a moderate or significant impact on prescription drug costs due to GLP-1 coverage, with that figure rising to 66% among firms with 5,000 or more employees. Simulations based on real-world drug prices estimate that premiums could increase between 5.3% and 13.8%, depending on patient adherence and eligibility criteria. In hypothetical scenarios assuming a $200 monthly drug cost, premium increases ranged from 1% to 3.9%, according to KFF researchers.

Employers have adopted various utilization management strategies to control spending. Many require prior authorization, step therapy, and participation in behavioral or lifestyle programs as conditions for coverage. These programs often restrict prescribing to specific clinicians who enforce clinical criteria and provide counseling, sources said. Employers also design eligibility pathways and support tapering or discontinuation of GLP-1 therapy to manage long-term costs, according to pharmacy benefit managers (PBMs) and employer health plan officials.

Coverage decisions vary substantially depending on whether employers are self-insured or fully insured. Self-funded employers typically collaborate with PBMs to negotiate formularies, pricing, and utilization rules. Fully insured employers have less control, with coverage decisions largely handled by insurance carriers and their PBMs. For example, Aetna allows employers to customize benefits to include or exclude GLP-1 coverage for weight management through prior authorization protocols, company representatives confirmed.

No broad federal mandate requires large employer health plans to cover GLP-1 drugs for obesity or diabetes. Under the Affordable Care Act (ACA), GLP-1s must be covered as essential health benefits only for type 2 diabetes treatment, not for weight loss. North Dakota became the first state to require GLP-1 coverage for weight loss by adding the drugs to its essential health benefits benchmark plan starting in 2025, although this mandate applies only to individual and small group ACA plans, not large group or grandfathered plans, according to state health officials and KFF reports.

Some hospital-affiliated health plans are updating their coverage policies in response to these trends. Mass General Brigham Health Plan announced it will revise GLP-1 coverage for fully insured commercial members beginning Jan. 1, 2026. Other employers have considered adjusting eligibility thresholds or coverage criteria based on budgetary impacts, KFF data show.

The growing use of GLP-1 drugs has led to higher-than-expected utilization rates among employees, contributing to increased pharmacy spending despite negotiated price reductions. Employers are investing in digital health solutions to support medication adherence and access management, industry experts said. Meanwhile, states are exploring inclusion of GLP-1 coverage in Medicaid and state employee health plans.

Experts warn that without targeted eligibility criteria or prior authorization, rising GLP-1 utilization could drive sustained premium increases. The Food and Drug Administration’s recent approvals expanding GLP-1 indications to cardiovascular disease and other conditions may prompt further policy reviews among employers and insurers, according to health policy analysts.

At present, compounded GLP-1 formulations, which lack FDA approval, are generally excluded from coverage. Plan sponsors of self-insured health plans retain discretion over coverage decisions but remain subject to ACA market reforms. The evolving landscape of GLP-1 coverage reflects ongoing efforts by employers, insurers, and regulators to balance expanding access with cost containment in employee health benefits.