What If Your Miracle Drug Came with a Payroll Stub?
I’ve recently waded deeper into the GLP-1 weight loss craze; not because I’m prepping for beach season, but because two things crossed my desk that pleaded to be connected.
First, I reviewed a survey that stopped me cold: only 14% of Americans think that health insurance plans should cover GLP-1s like Wegovy, Zepbound, and Saxenda when they’re prescribed solely for weight loss. Not for diabetes, not for PCOS, just good old-fashioned, “I want to look better in my new Sydney Sweeny jeans,” weight loss.
Second, I had a client, fresh off firing a national health insurer and moving to a leaner, open-access self-funded model, ask if they should now cover GLP-1s for weight loss. Their plan already covered these drugs for Type 2 diabetics, as virtually all do. But the question on the table was whether to add weight-loss coverage for the non-diabetic crowd, as their previous fully insured plan had.
After looking at the numbers, they chose not to add it. Smart move. GLP-1s are already being overprescribed, and adding them for general weight loss in a self-funded plan is a fast way to blow a hole in your budget. Many fully insured plans still do it because, frankly, they don’t care about your budget. That move simply allows them to jack up your premium and means they get to keep a larger piece of the pie under the Obamacare MLR Mandate rules. But their question made me think: if a company did consider adding this benefit and those employees actually understood what it did to their paycheck, would they really want to add it?
The Price Tag Behind the Shot
Let’s walk through the math.
Imagine a self-funded employer with:
- 200 employees
- 375 total plan members (belly buttons insured for those reading outside of the industry)
- GLP-1s already covered for diabetes
- Proposal: Add GLP-1s for weight loss (Wegovy, Zepbound, etc.)
Here’s the breakdown:
- $800/month net cost per prescription (after discounts)
- An estimated 12% take-up among eligible adult members (about 250 people, removing young children from the equation)
- That’s about 30 people expected to use the drug
- Annual cost per user: $9,600
- Total new cost to the plan: $288,000 per year
Divide that cost across the 200 employees footing the bill:
- $1,440 per employee per year
- $120 per month, regardless of whether they use the drug
Let’s Sweeten the Pot. Would That Change Anything?
Now here’s the part that interests me most.
What if a very generous employer says, “Look, we’ll pay half of it.” That means:
- Employer covers $60 per employee per month
- Employees cover the other $60 themselves
And then the employer gives employees the choice:
Do you want to pay $60 more per month so that everyone has access to GLP-1s for weight loss? Or do we just keep things the way they are, with no new benefits and no new costs?
No threat. No reduction. Just: “Do you want to add this benefit and pay for it?”
Knowing that only 14% of employees think this should be covered anyway, when they’re blissfully ignorant and not thinking about what this does to their total compensation, what do we really think the answer would be?
You could run that vote a hundred times and I’ll bet you get the same answer 99 of them: No thanks. I’d like to keep my pay, please.
Reality Check: Employer Healthcare Isn’t a Wishlist
It’s easy for people to say “we should have that” when someone else is paying. But when the bill lands in their own mailbox? Priorities change. This isn’t the federal government, where we can digitally and magically create money out of thin air, hammer the populace with nebulous inflation, and run deficits forever.
No, in the land of employee benefits, the employee pays for every nickel in the form of redirected compensation. And that’s why I’m glad this client didn’t add the coverage. They didn’t need a referendum or a committee; they just looked at the data and made a prudent decision.
If you’re running a self-funded plan, you don’t have the luxury of magical money. You see what things cost. And you feel it when benefits creep in without scrutiny.
GLP-1s for weight loss might feel like progress. But if your employees wouldn’t spend their own $120 (or even $60) a month to make it happen, it probably isn’t worth forcing it on them in the name of “health.”
Sometimes the best benefit design is the one that never makes it off the whiteboard.
SOURCE: https://gottwals.substack.com/p/glp-1s-everyone-wants-the-shot-until
