GLP-1 medications like Ozempic and Mounjaro were originally developed for Type 2 diabetes but are now widely used for weight loss, heart disease, and, in some cases, certain eating and substance use disorders. By mimicking hormones that regulate blood sugar and appetite, they have proved highly effective at improving blood sugar levels, supporting sustained weight loss, and reducing cardiovascular risk factors. Since the FDA approved GLP-1s for obesity treatment, demand has surged — yet the high cost (with claims averaging $1,200 per person per month) and need for ongoing therapy present significant challenges for employer health plans.
Coverage varies across insurers and plan types. Plans typically cover GLP-1s for FDA-approved indications, like diabetes and certain cardiovascular conditions, but coverage for weight loss remains limited, based on employer preference. According to a 2024 KFF survey, only 18% of employers offer GLP-1 coverage for weight loss, with coverage more common among larger employers. Coverage often requires participation in structured weight management or lifestyle programs. Employers not offering the benefit often cite high costs and uncertain return on investment. Fully insured plans frequently exclude anti-obesity coverage or impose significant cost-sharing or an additional coverage buy-up option.
But this may soon shift. The Trump administration recently announced plans for a “limited Medicare and Medicaid demonstration” to expand access to GLP-1 drugs. Still in development, this is expected to begin in mid-2026. The administration also plans to launch TrumpRx in early 2026, a federal purchasing platform offering negotiated, lower-cost GLP-1 pricing directly to consumers and serving as the pricing benchmark for the Medicare/Medicaid demonstration.
These initiatives have prompted pharmaceutical companies to reconsider the price of the drugs and health plans to reevaluate coverage and cost containment strategies — an outcome which is welcomed by employer plans facing growing pressure to expand access. Employees increasingly seek access to GLP-1 coverage specifically for weight loss, viewing it as a high-value benefit and differentiator in recruitment and retention. For right now, however, employers must balance employee expectations against substantial cost considerations. As a result, given the popularity of GLP-1s, related programs carry elevated compliance and litigation risk.
To help employers navigate this evolving landscape, the discussion below outlines some common benefit offerings, certain nondiscrimination considerations, and practical takeaways.
GLP-1 Benefit Offerings
Reaction to the high cost of GLP-1s has led many fully insured and self-insured group health plans to avoid covering these drugs for weight loss. As a result, employers are exploring creative alternatives to meet demand without absorbing the full cost, such as health reimbursement arrangements (HRAs) dedicated to GLP-1s or “GLP-1 carve-out programs” offered by vendors. These programs often pair medication access with disease management features – behavioral coaching, pre-treatment requirements, and flexible funding mechanisms – to manage expenses while addressing employee demand. While these approaches aim to control costs, they also open the door to compliance questions.
Employers exploring alternatives such as HRAs or GLP-1 carve-out programs for weight loss must ensure these arrangements are “integrated” into the employer’s major medical plan through the plan documents to comply with the ACA. A nonintegrated program limited to GLP-1 coverage risks violating ACA requirements, including the annual dollar limit prohibition. When a program is integrated, it also benefits from the plan’s existing compliance framework under ERISA, COBRA, and other applicable requirements, though employers must still assess how the added program affects these obligations.
GLP-1 HRA Model
One way to help employees afford GLP-1 medications for weight loss is through an HRA, which can be structured as an excepted benefit HRA (EBHRA) or integrated HRA. HRAs may include a debit card and permit employees to use funds to purchase medications through discount or direct-to-consumer pharmacies like Cost Plus Drugs, manufacturer programs, or emerging platforms such as TrumpRx.
EBHRA: An EBHRA may reimburse GLP-1 prescriptions for weight loss, but only up to $2,200 for 2026 (up from $2,150 for 2025). The “excepted benefit” status exempts it from ACA requirements, but ERISA and COBRA still apply. This means it may be offered alongside a major medical plan or separately, available even if the employee declines enrollment. While the reimbursement maximum is extremely modest compared to the high list price of these medications, lower pricing through discount or direct-to-consumer pharmacies might make EBHRAs a viable GLP-1 coverage option.
Integrated HRA: An integrated HRA is an employer-funded, self-insured group health plan tied to the employer’s group health plan. As discussed above, an integrated HRA is available only to those enrolled in the group health plan, which ensures compliance with ACA market reform requirements, ERISA, and COBRA. Among other things, plan terms should clearly define eligibility criteria, specify reimbursable expenses, outline how unused amounts will be treated, and detail claim substantiation requirements. Reimbursements are tax-free for employees. Funding levels are typically based on budget limitations, workforce health needs, and broader benefit objectives, such as supporting wellness or improving retention. GLP-1 HRAs could lead to cost savings when offered as an alternative to coverage under the major medical/pharmacy plan.
GLP-1 Carve-Out Program Model
Most carve-out GLP-1 programs generally share a similar approach — incorporating a pre-treatment phase, behavioral coaching, and clinical monitoring (some may also include financial criteria) before participants are eligible for subsidized medication. Some programs are provided within the plan’s existing pharmacy program, while others are provided through a separate vendor. Employers may fund part of the prescription cost, with employees contributing the remainder on a pre-tax basis under a cafeteria plan. Debit cards and direct manufacturer purchasing are used to help streamline the process and keep costs down. Unused funds may revert to the employer if eligibility requirements are not met.
Note that programs aimed at improving medication adherence and outcomes are considered disease management programs. While these approaches can enhance access and control costs, they should be carefully structured to comply with federal nondiscrimination requirements under HIPAA’s wellness program rules, the Americans with Disabilities Act (ADA) protections, Genetic Information Nondiscrimination Act (GINA) information safeguards, Mental Health Parity and Addition Equity Act (MHPAEA) parity standards, and the ACA’s Section 1557’s prohibition on discrimination in health programs.
Wellness Program Nondiscrimination Considerations
HIPAA Wellness/Disease Management Program Rules
HIPAA generally prohibits group health plans from discriminating among similarly situated individuals based on health factors with respect to eligibility, premiums, or contributions. However, HIPAA allows group health plans and insurers to vary premiums, contributions, and cost-sharing if individuals participate in programs of health promotion or disease prevention — commonly referred to as wellness and/or disease management programs. The regulations distinguish between participatory programs, which are broadly available and not based on health status, and health-contingent programs, which require individuals to meet a standard related to a health factor to earn a reward. When working with weight management vendors, health-contingent programs must comply with five requirements: opportunity to qualify, reasonable design, uniform availability, reasonable alternative standards, and appropriate notice. For more information on HIPAA nondiscrimination requirements for health-contingent programs, please see our NFP Observation article, Tobacco Surcharges: Is Your Wellness Program Up to Snuff?, in Compliance Corner.
A program that identifies and coaches individuals with chronic conditions, such as those offering GLP-1s for weight loss, may be subject to HIPAA’s wellness rules if it includes incentives or penalties based on participation or outcomes. For example, requiring participation in a coaching program as a condition for reduced cost-sharing or imposing higher premiums or deductibles for nonparticipation, would trigger HIPAA’s nondiscrimination requirements.
Although vendors may not market these GLP-1 programs as “wellness” initiatives or “disease management” efforts, the underlying design can still trigger HIPAA’s wellness rules if eligibility or cost-sharing varies based on participation or health status. Even without explicit “rewards,” like cash or premium reductions, the subsidized medication functions as the reward. Employers should not assume vendors have addressed this issue; it’s important to recognize that programs offering medication subsidies tied to participation may fall under HIPAA’s health-contingent wellness rules.
ADA and GINA Wellness Program Rules
The ADA prohibits discrimination on the basis of a disability in employee benefits but generally does not regulate specific plan terms (e.g., limitations) as long as coverage is equally available to all employees and not based on disability-related distinctions. A GLP-1 program that incorporates a medical exam (like blood work or a biometric screening) or a health risk assessment must also comply with the ADA since these activities are considered disability-related inquiries. Like the HIPAA wellness rules, the program must be reasonably designed. This means that if biometric data is collected, it should have a clear health purpose, such as providing personalized risk feedback or appropriate interventions.
The program must also be voluntary, meaning that participation is not required and that employees will not be penalized for not participating.
There is currently no clear guidance on the amount of incentive that would no longer be considered “voluntary” under the ADA (i.e., the point at which not receiving the incentive becomes a penalty). Previously withdrawn regulations suggested wellness programs tied to incentives and over 30% of employee-only coverage was not voluntary. Without clear guidance and given the current enforcement uncertainty, employers may wish to consult with legal counsel on this voluntary standard before implementing.
Employers must make reasonable accommodations for employees who are unable to participate in certain wellness activities due to a disability. For example, a wellness program that includes a fasting blood draw to measure triglycerides may need to offer an alternative biometric test for employees who are unable to fast due to health complications. Further, notice must be provided on how medical information is collected and used, who will receive it, and how it will be kept confidential. The notice should be distributed prior to making a medical inquiry, with enough time for the participant to decide whether or not to participate in the wellness program.
A GLP-1 wellness program that asks about family medical history, such as diabetes, heart disease, or obesity, must also comply with GINA. Participation, coverage, or any incentive must not be conditioned on providing genetic information (such as an employee’s family medical history or spouse’s health status). As with the ADA, the program must be voluntary and include notice on what data is collected, how it will be used, and confidentiality protections. GINA also requires written authorization for any disclosure.
Disability Discrimination Considerations
ACA Section 1557 and the ADA
The ADA prohibits discrimination based on disability in employee benefits but generally does not regulate specific plan terms if coverage is equally available to all employees. By contrast, the ACA mandates certain treatments, and MHPAEA requires parity for mental health and substance use disorder benefits.
Recent clinical studies suggest GLP-1s may be an effective treatment for substance use disorders. Strictly limiting GLP-1 coverage to medical conditions (diabetes, heart disease, and obesity) may violate MHPAEA. For example, any off-label use exclusion should be applied comparably for treatment of medical conditions and mental health conditions.
While obesity is often associated with health conditions, most courts have held that obesity itself does not qualify as a disability under the ADA or Section 1557 of the ACA. Both laws prohibit discrimination based on disability, but to meet that standard, obesity must stem from an underlying physiological disorder, and that disorder must substantially limit a major life activity.
Given the high cost and popularity of GLP-1s, legal challenges to coverage exclusions for weight loss are expected to continue. To succeed, a plaintiff must show the exclusion is based on disability status. Neither a physician’s GLP-1 prescription for weight loss nor an obese BMI score alone is sufficient to establish disability. Courts require evidence of a qualifying impairment that significantly restricts major life activities, such as walking or breathing. Most exclusions apply broadly to overweight and obese participants, regardless of disability status. Although most litigation has not succeeded, the possibility remains that a claim could succeed if claimants establish that an exclusion creates a disparate impact on individuals with recognized disabilities. For examples of recent court decisions, please see our Compliance Corner articles Court Dismisses Weight Loss Drug Discrimination Claim and Court Dismisses Weight Loss Drug Case Under Section 1557.
For the most part, exclusions for weight-loss medications appear permissible under Section 1557 and the ADA, provided they are applied uniformly and do not single out individuals with a qualifying disability (e.g., diabetes, bulimia nervosa, or any other condition that substantially limits a major life activity).
Practical Takeaways
Employers exploring cost containment strategies around GLP-1s for weight loss should consider the following:
- Employee Communications: Plan documents, amendments, and open enrollment materials should clearly explain GLP-1 coverage policies, including any limitations or requirements for weight loss medications. Transparent communication helps manage employee expectations and reduces confusion.
- Integration with Major Medical Plans: With the exception of EBHRAs, HRAs, or GLP-1 carve-out programs, it must be “integrated” with the employer’s major medical plan to comply with ACA rules. Nonintegrated programs risk violating ACA annual dollar limit prohibitions and may trigger ERISA and COBRA compliance issues. Integration helps satisfy these group health plan requirements.
- Wellness/Disease Management Program Compliance: Weight management program designs should be reviewed to determine if HIPAA and ADA wellness/disease management rules apply. Programs that vary eligibility or cost-sharing based on participation or health status may be subject to nondiscrimination requirements, which require establishing certain guardrails.
- Legal and Compliance Risk: Employers should regularly review plan designs to ensure compliance with HIPAA, ADA, GINA, ACA Section 1557, and MHPAEA. Given frequent litigation and regulatory changes, employers should seek input from legal counsel to confirm that compliance safeguards are in place.
Final Thoughts
GLP-1 coverage for weight loss offers both opportunities and compliance challenges for employer health plans. As demand increases and program models develop, employers must weigh cost, return on investment, and compliance risk — while recognizing that employees are eager for GLP-1 coverage they can afford. Coverage and wellness initiatives should be thoughtfully designed to meet wellness program nondiscrimination requirements (HIPAA, ADA, GINA), disability nondiscrimination standards (ACA and ADA), and MHPAEA. Vendors rarely address compliance issues, and the market is evolving quickly; with litigation and regulatory changes ongoing, regular plan reviews are essential to keep programs compliant and responsive. NFP’s Benefits Compliance and Rx Solutions teams will continue to track litigation, regulatory, and industry developments to provide the latest compliance guidance. For more information about GLP-1 benefit offerings, reach out to NFP’s Rx Solutions team.