How companies find solutions to employer GLP-1 coverage

As employers navigate their options around GLP-1 coverage for weight loss, some are considering strategies for making coverage more affordable for their businesses.

In particular, employers are weighing vendor solutions and compounded GLP-1s.

Indeed, GLP-1 coverage is an attractive benefit for employers, as discussed in part one of this two-part series published earlier this month.

A 2023 survey from Accolade found that 79% of human resources (HR) decision-makers agree that GLP-1 coverage will help employees' long-term health. Another 77% agreed that GLP-1 coverage would make employees feel that they got a better health insurance package.

But the decision to cover GLP-1 drugs is not an easy one for most employers, according to Manuel Jurado, associate partner at The Dedham Group, a strategy consulting firm for the life sciences.

The high cost of the drugs, plus employee churn and limited evidence base supporting a long-term value proposition, is keeping many employers from offering full GLP-1 coverage as a benefit. In an October 2024 data set, KFF said fewer than one in five firms with 200 or more employees covered the drugs that year.

But as the debate around GLP-1 coverage continues, new players are entering the healthcare marketplace to expand patient access, Jurado said.

Vendor solutions offer a pathway for employers to expand access to their employees and potentially build some long-term value around the benefit. Some employers treat these as supplemental to GLP-1 coverage, while others view them as alternatives.

Exploring vendor solutions for employer GLP-1 coverage

As employers consider the potential ROI for GLP-1 coverage, some are adding additional solutions to ensure employees see success on the drugs.

"There's a lot of vendors that are coming out trying to find creative ways to help employers cover these therapies," Jurado explained during an interview. "My team does a lot of benchmarking for these vendors, and there are new companies that come out, whether it's a vendor or a point solution, such as an Omada or Noom or Vita or Virta on that side."

Notably, these vendors don't necessarily lower the employer cost of GLP-1 coverage. However, they can create a tailored approach to prescription and offer the wraparound care necessary to ensure an employer sees ROI for covering these costly medications.

Jurado explained that most vendor solutions related to weight loss and GLP-1 receptor agonists fall into one of two categories.

Some vendors offer wrap-around capabilities for members on GLP-1s to ensure success and support healthy lifestyles. These tools frequently offer health coaching, diet and nutrition services and capabilities that support exercise routines. Some even offer coaching specific to GLP-1s, assisting members as they navigate side effects and manage protein intake.

"Those [vendors] are making a lot of noise with employers because they're helping these employers add on to the benefit of GLP-1s," Jurado said.

The second group of vendors employs something similar to a step therapy approach. This strategy involves multiple phases.

First, a member might start with three to six months of lifestyle and diet coaching, for example. If the member loses weight and is progressing toward their health goals, then the vendor will not prescribe a GLP-1. However, if the member is not improving after the allotted timeframe on the initial solution, the vendor might prescribe a GLP-1 in tandem with continued digital support, such as coaching.

Finally, if the member continues to see strong results after the second trial period (typically defined as losing 15-20% of their weight), their prescriber may de-prescribe GLP-1s. But if the results continue to lag, then they will remain on the GLP-1 medication alongside the digital supports.

"You can see there that there's already savviness in controlling how patients get GLP-1s and when they get them," Jurado pointed out.

Which vendor type employers choose largely depends on their financial situation and employee population. Most of the employers that Jurado knew wanted to cover GLP-1s without access barriers, with the only parameters being that members had to fall within the FDA's health-related weight loss cut-off point of a BMI of 30 or a BMI of 27 with comorbidity. But many employers are not in the situation to make such an offer to their employees.

"Some of these organizations, if they did that, even if you're just talking about a BMI of 30, that's almost 50% of their population that falls within that bucket, which is crazy," Jurado shared.

"That just means that a lot of these cost-sensitive organizations aren't able to do that, and they're going to have to put in guardrails themselves -- prescribing is controlled at the front end, back end, or somewhere in the middle, or even in situations where both when employees start and when they get off are controlled."

Are compounded GLP-1s a coverage alternative?

Employers might be more open to members getting compounded drugs if they, themselves, can't afford to provide access.

To be clear, Jurado did not mention any employers endorsing compounded versions of GLP-1s, which can be the source of debate for many healthcare providers concerned about the safety and efficacy of compounding. But drug compounding does play a role in these conversations as many of the consumer-facing virtual care providers, like Ro and Hims and Hers, market access to compounded GLP-1s.

"Compounding, to an extent, has opened access to patients who are with employers who don't have access," Jurado noted. "But there are risks with compounding with the safety issues. In many cases, you can't control what you're putting in your body. Some are better than others, but you can't guarantee that the product you're getting has gone through the rigorous manufacturing hurdles that have been set by the FDA for Novo Nordisk or Eli Lily."

Still, it's likely some employers view compounding as a short-term solution while they sort out how they can afford coverage for branded GLP-1s.

In the interim, employers need to continue assessing the regulatory and financial landscape surrounding GLP-1s. Understanding the company's financial situation will be the key to determining the breadth of weight loss benefits employers can give.

As employers explore other options, like working through weight loss coaching and support vendors, Jurado suggested HR managers not lock into long-term contracts. This will allow flexibility as the regulatory landscape continues to shift.

Kelsey Waddill is a managing editor of Healthcare Payers and multimedia manager at Xtelligent Healthcare. She has covered health insurance news since 2019.

Sara Heath has covered news related to patient engagement and health equity since 2015.