Many plans have long excluded weight-loss medications, and others have recently added or considered adding exclusions when these high-cost medications are prescribed for weight loss instead of diabetes. Recently, however, a more measured approach is starting to take shape around whether to cover GLP-1s—formally, glucagon-like peptide agonists—for weight loss, with plan sponsors balancing the near-term financial impacts of covering the drugs with the long term plan and productivity costs of untreated obesity, arising from comorbidities such as cardiometabolic and musculoskeletal disorders. More and more employers are considering covering these drugs when prescribed for weight loss, while implementing certain "guardrails" to manage cost and improve health outcomes—for example:

Requiring prior authorization to ensure that GLP-1s are a clinically appropriate treatment.
Requiring step therapy, so that alternative lower-cost weight loss treatments must be tried first.
Pairing access to GLP-1s with behavior modification programs to improve long-term success in keeping weight off.
Narrowing the provider network through which participants can access GLP-1s.
Exploring imposing lifetime or annual dollar limits on coverage of these drugs when prescribed for weight loss.

However, before making these types of changes, there are steps employers can take to prevent administrative complications and legal problems down the road:

Ask whether the plan's pharmacy benefit manager or third-party administrator has well-developed clinical guidelines that can be applied to claims for weight loss medications. This may include coverage of certain medications and not others, or coverage only within certain parameters, such as a clinical diagnosis of obesity or related health problems.
Alternatively, if in the future Medicare begins covering weight loss drugs, future Medicare guidelines might be helpful for administration of these claims.
Consider whether certain medications are currently in short supply or are likely to be subject to shortages in the foreseeable future.
Consider whether there are any ongoing claims or appeals by participants over coverage of weight loss medications and how any recently denied claims would be treated under new plan guidelines.
Review claims data for any recent increases in diabetes medication claims for participants with no prior history of diabetes. This may be an indication of off-label prescribing and use that should not be allowed under current plan rules.

When it comes to deciding what prescription drug benefits are covered and under what circumstances, the Employee Retirement Income Security Act of 1974 ("ERISA") allows employers a fair amount of discretion. This is particularly true in the self-funded health plan market. There, plan sponsors have broad latitude to design their plans to fit the unique needs of their employee populations, benefit philosophies, and financial constraints. When making any changes to health plan coverage of GLP-1s (or other benefits), some compliance items should be kept in mind:

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Should employer plans cover GLP-1s for weight loss?

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