What employers should know about access, outcomes, and the growing effect on insurance costs.
GLP-1 medications have moved from a specialized diabetes treatment to a mainstream health-benefit issue. They can improve health outcomes for appropriately selected patients, but their high price and rapidly expanding use are also changing pharmacy spending, benefit design, and renewal conversations. For employers, the useful question is no longer whether GLP-1s matter. It is how to provide responsible access while keeping coverage sustainable.
The headline numbers
In late 2025, 12% of U.S. adults said they were currently taking a GLP-1 and 18% said they had used one at some point. Mercer estimates that rising GLP-1 use alone will add about one percentage point to employer health-benefit cost growth in 2027.
From diabetes drug to broad clinical platform
GLP-1 receptor agonists mimic a hormone involved in blood-sugar regulation, digestion, and appetite. The category includes products approved for type 2 diabetes and products approved for chronic weight management. Indications continue to expand, including approvals tied to cardiovascular risk reduction for certain populations.
That distinction matters for benefits. A plan may cover a drug for diabetes but exclude the same drug class when prescribed only for weight management. Medical-necessity rules, prior authorization, formulary placement, and the employee’s diagnosis all affect whether a claim is covered.
Use is rising quickly
Current GLP-1 use among U.S. adults
Source: KFF Health Tracking Polls
KFF reported that current use doubled from 6% of adults in spring 2024 to 12% in late 2025. The 2025 survey found even higher current use among adults with diabetes (45%), heart disease (29%), or a recent diagnosis of overweight or obesity (23%). Women reported higher current use than men, 15% versus 9%.
Why these drugs are affecting premiums
Premiums reflect expected claims. GLP-1s affect that calculation through high per-patient cost, rising utilization, longer treatment duration, and broader approved uses. Even after negotiated discounts, a modest increase in the number of members using these drugs can materially change a small group’s pharmacy experience.
GLP-1 weight-loss drugs as a share of annual claims
Source: International Foundation of Employee Benefit Plans; responding plans covering GLP-1 weight-loss drugs.
In the International Foundation’s 2025 survey, GLP-1 weight-loss medications represented an average 10.5% of annual claims among respondents, up from 6.9% in 2023. More than one-quarter of employers reported that these drugs exceeded 15% of annual claims. Separate Mercer modeling attributes about one full percentage point of 2027 employer health-benefit cost growth to increasing GLP-1 utilization.
GLP-1s are not the sole reason rates are rising. Hospital prices, higher utilization, specialty drugs, behavioral-health demand, provider consolidation, and payment disputes also contribute. In the ACA-compliant small-group market, insurers proposed a median 14% increase for 2027, and KFF’s review found a median underlying medical trend of 10.8%.
Higher short-term spending may produce longer-term value
The cost discussion should not erase the clinical value. For appropriate patients, GLP-1 therapies can improve blood-glucose control and support meaningful weight loss. Some products have demonstrated cardiovascular benefits for specified populations. Better management of obesity and diabetes may eventually reduce complications, disability, and some medical claims.
The timing is the challenge. Pharmacy costs appear immediately, while any reduction in heart attacks, strokes, kidney disease, or other complications may emerge over years and may not accrue to the same employer plan. Employers should therefore be cautious about assuming either that the drugs will quickly pay for themselves or that they offer no economic value.
How employers are responding
- Use prior authorization tied to FDA-approved indications and evidence-based clinical criteria.
- Require periodic reauthorization based on adherence, tolerability, and documented response.
- Pair medication access with nutrition, activity, and behavioral support without creating unnecessary barriers.
- Audit the pharmacy contract, rebates, formulary placement, and specialty-drug guarantees rather than looking only at the headline discount.
- Review diabetes-indicated and weight-management claims together; exclusions in one category do not eliminate GLP-1 exposure.
- Communicate clearly so employees understand coverage, documentation requirements, and possible out-of-pocket costs.
Among employers covering GLP-1s in the International Foundation survey, 78% used utilization management; 96% of that group required prior authorization, and 68% used eligibility requirements. These controls should be clinically defensible and administered consistently.
What employees should understand
Employees should confirm coverage before beginning treatment, because a prescription does not guarantee that the health plan will pay. They should use a licensed clinician and an FDA-approved product obtained through a legitimate pharmacy. If a medication is prescribed to treat a diagnosed condition, eligible out-of-pocket expenses may generally be payable from an HSA or health FSA, subject to account rules and required documentation.
Employer takeaway
Treat GLP-1 coverage as a benefit-strategy decision, not simply a yes-or-no drug decision. Ask what population is covered, what clinical safeguards apply, how the pharmacy contract prices the category, and how the program will measure outcomes and total cost over time.
Sources
- KFF: 2025 GLP-1 Health Tracking Poll
- International Foundation of Employee Benefit Plans: 2025 employer survey
- Mercer: 2027 employer health-benefit cost outlook
- KFF: 2027 small-group premium analysis
This article provides general educational information, not medical, legal, tax, or plan-specific advice. Coverage varies by plan and indication. Employers should review decisions with their broker, carrier, pharmacy benefit manager, and legal or tax advisers as appropriate.
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