Employers weigh dropping GLP-1 coverage as costs keep rising

Workers who have built monthly budgets around GLP-1 coverage could hit an affordability cliff if employers begin pulling back next year. Employer surveys now show the embrace of obesity drugs giving way to a harder calculation: how long can companies pay for medicines that are popular, effective and expensive?

Business Group on Health said 67% of surveyed employers covered GLP-1s for weight management in 2026, but about 10% of employers that already cover the drugs said they plan to drop that benefit in 2027. Mercer found a similar retreat, with 5% of large employers saying they plan to end coverage next year. The pressure is broad enough that nearly eight in 10 employers in Business Group on Health’s survey said GLP-1s are driving up their health care costs.

The concern is not limited to one drug class. Mercer said the average employer-sponsored health plan cost reached $17,496 per employee in 2025 and is projected to rise another 6.7% in 2026, the sharpest increase in 15 years. Prescription drug spending rose 9.4% on average among large employers, and Mercer said 77% of large employers described managing overall GLP-1 costs as extremely or very important. In Mercer’s own survey, coverage expanded from 44% of large employers in 2024 to 49% in 2025, a sign of how quickly the debate has moved from adoption to retrenchment.

One signal came from inside the insurance industry itself. Cigna will stop covering GLP-1 weight-loss drugs for its own employees effective July 1, 2026, though workers may still buy the medicines elsewhere. At the same time, Novo Nordisk and Eli Lilly are moving newer pill versions into the market alongside injections, while direct-to-consumer pricing and TrumpRx.gov discount channels could reshape how patients access the drugs and weaken the leverage of pharmacy benefit managers.

The timing points toward 2027 as a possible turning point. The Centers for Medicare & Medicaid Services says negotiated maximum fair prices for 15 Medicare Part D drugs take effect on January 1, 2027, and Mercer says that lines up with Novo Nordisk’s announced price cuts and expected new obesity drug entrants. Employers will have to decide whether to keep broad coverage to stay competitive in hiring or tighten access to protect premiums, a choice that could leave American workers in a two-tier system where some keep coverage and others are pushed toward cash-pay arrangements.