Glucagon-Like Peptide-1 receptor agonists, or GLP-1s, are naturally occurring hormones that regulate blood sugar and appetite and have recently been at the forefront of treatment for type 2 diabetes and obesity. Drugs such as Wegovy, Mounjaro, Zepbound, and Ozympic have become prominent household names as they have been seen to be some of the most effective and fastest treatments to help individual weight loss. However, the popularity of these drugs has quickly become some of the most significant cost drivers for employer-sponsored health-plans. As demand grows, premiums for employer provided coverage could rise by as much as 14 percent, according to Blue Cross and Blue Shield.
A 2025 survey conducted by the Kaiser Family Foundation found that 1 in 5 employers cover GLP-1s for employees primarily prescribed for weight loss and that such utilization has been higher than expected causing greater prescription drug spending. This usage is being seen across the country as claims for GLP-1s have risen from 6.9% to 10.5% in 2025. However, adherence to treatment plans has generally been found to be low as nearly 2/3rd of patients discontinuing treatment before the 12-week mark that is a critical point for meaningful weight loss. While perfect adherence leads to higher premium costs due to sustained drug use, even short-term GLP-1 use incurs high pharmacy spending.
GLP-1s as a treatment for obesity involves some legal implications that can also be considerations for employers. The federal courts have weighed in on how obesity should be treated under the Americans with Disability Act (ADA) and these rulings may have substantial effects on health care design, coverage decisions, and costs. Most federal courts have found that nonmorbid obesity is not a disability under the ADA because it does not by itself limit major life activity. This holding has been adopted by the Second, Sixth, Seventh, and Eighth Circuits. However, the Equal Employment Opportunity Commission and some district courts have taken the position that morbid obesity can be an impairment affecting work and daily life functions and that some of the conditions that accompany obesity such as heart disease, diabetes, and sleep apnea qualify under the ADA and would be grounds for prescription and treatment by GLP-1s.
Certain state and local jurisdictions, such as San Franscico and the state of Michigan, have developed stances on the topic as well including weight as a protected class in anti-discrimination laws. While some state courts have ruled in a different direction from the federal courts recognizing weight as a potential disability without requiring any underlying physiological conditions under state anti-discrimination laws.
These rulings from state and federal courts on the ADA and the disability status of obesity have a variety of implications for employer sponsored health plans. At the federal level, the ADA does not require employers to provide coverage for a particular medical condition along with coverage for specific treatments or drugs. However, the ADA does prohibit employers from discriminating against employees with disabilities in the terms and conditions of employment that includes the design and administration of health benefits that are offered to employees. Some states and municipalities have started to define obesity as disability. Others have begun moving toward coverage mandates with states, such as North Dakota requiring insurance coverage for GLP-1s under their essential health benefits benchmark plans with a select few exploring options to expand obesity treatment in Medicaid and state employee health programs.
With rising demand and costs for employer plans, plan sponsors should take steps to be aware of the various legal factors that may affect coverage options and prices. Plan sponsors should:
- Review their ADA compliance to ensure terms and provisions of their plans do not limit or exclude coverage based upon disability;
- Review HIPAA nondiscrimination risks and confirm that similarly situated employees, regardless of disability status, are subject to the same GLP-1 terms;
- Ensure MHPAEA compliance through the plan’s comparative analysis;
- Discuss with carriers and insurance providers to understand coverage options and how coverage impacts rebates and other cost-saving measures;
- Evaluate prior authorization and other steps in a plan’s design to manage utilization and cost exposure;
- Determine if the plan is subject to any state or local mandates or holdings that require coverage or define obesity as a protected class/disability;
- Communicate with employees the plan’s coverage and accessibility for GLP-1 drugs so that employees are not confused or have expectations for specific coverage; and
- Explore other plan coverage options such as limiting coverage to employees with highest need, pairing GLP-1 coverage with dietary work, exercise plans, and behavioral health therapies, and alternative payment arrangements with drug manufacturers.
If you’re evaluating GLP-1 coverage or exploring ways to control rising pharmacy costs, our team can help you determine the right approach for your business.
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