GLP-1 drugs and your health plan: the decision Michigan employers are making now.
Weight-loss drugs such as Wegovy and Zepbound have become one of the largest line items in many prescription budgets. Covering them, restricting them or excluding them is a plan decision with real cost on each side. Here is what has changed and how to decide.
What the research says about coverage, cost and use.
Figures below come from national surveys and studies, each linked to its source. Your own plan’s numbers will differ, which is why we model them from your claims.
Who Covers Them
19% of firms with 200 or more workers covered GLP-1s for weight loss in 2025, rising to 43% of firms with 5,000 or more (KFF 2025). A national employer survey puts it at 49% of employers with 500 or more employees.
Share of Claims
Among employers surveyed by the International Foundation of Employee Benefit Plans, GLP-1s for weight loss rose to roughly 10 to 11 percent of annual claims by 2025. Figures vary by employer and plan design, so compare them against your own claims data (IFEBP).
Most People Stop
A Prime Therapeutics study found only about one in twelve members still taking a weight-loss GLP-1 three years after starting (Prime Therapeutics, 2025).
Offsets Take Time
The same research group found total cost of care for users running above a matched control group in both of the first two years, so savings from better health, if they come, arrive later than the drug cost does. Employers weighing coverage should plan for drug spending now and treat any later medical savings as a possibility to monitor, not a promise. Track utilization and costs over several years before drawing conclusions.
List Prices
Early 2026 list prices ran about $1,350 a month for Wegovy and about $1,090 for Zepbound. Novo Nordisk has announced a cut to $675 a month for Wegovy and Ozempic from January 1, 2027 (PMLive).
In Michigan
Blue Cross Blue Shield of Michigan and Blue Care Network stopped covering Wegovy, Zepbound and Saxenda for weight loss for fully insured large groups with their pharmacy coverage from 2025. Diabetes GLP-1s stay covered, and self-funded groups decide for themselves (BCBSM alert).
The market moved more in the last year than in the five before it.
Several changes affect what coverage costs and what employees can get without the plan.
Cash Prices Employees Can Pay Themselves
Manufacturers now sell directly to patients. Lilly’s self-pay Zepbound vials start at $299 a month, and a November 2025 agreement with the federal government set cash prices of roughly $350 a month for the leading brands. TrumpRx now lists these prices; see how TrumpRx works with your plan.
Pills Instead of Injections
The FDA approved a Wegovy pill in December 2025 and Lilly’s oral orforglipron, sold as Foundayo, in April 2026. Oral options may change how pharmacy benefit managers build their formularies. Employers should ask their pharmacy benefit manager how it expects new forms to affect prices, rebates and utilization management, and revisit the plan’s coverage rules as the market and available products change.
Pricing Aimed at Employers
In March 2026 Lilly announced an employer channel for Zepbound, reported at about $449 a month and run through independent program administrators outside the standard insurer route. Whether it beats your current net price depends on your contract. Before making any change, compare the offer against your current net price, including rebates, fees and clinical programs, and ask counsel and your adviser how it fits with your contract and plan documents.
Compounded Versions Wound Down
The FDA declared the semaglutide and tirzepatide shortages over in late 2024 and early 2025, and the grace periods for compounding pharmacies ended during 2025. Plans should not assume a cheaper compounded route is available. Because this area has been shifting, employers should check current status with their pharmacy benefit manager and counsel before relying on any alternative source, and should discourage employees from buying unapproved products on their own.
Four ways employers handle it, and what each one costs you.
There is no single right answer. The choice depends on your funding, your workforce and your budget, and it belongs inside your wider pharmacy benefit strategy.
Cover With Guardrails
Prior authorization with a body-mass-index threshold, reauthorization at set intervals and sometimes a required lifestyle program. In an earlier IFEBP survey, 96% of employers using utilization management required prior authorization. Clear criteria and a defined review schedule help employees understand what to expect and make decisions easier to defend. Document the rules, communicate them early and revisit them as evidence and prices change.
Cover for Diabetes Only
The most common position. Diabetes use stays covered; weight-loss use is excluded or left to the employee’s own cash purchase. This approach is simple to explain and administer, but it requires clear plan language so that claims are handled the same way every time. Employers should ask whether employees will need documentation of diagnosis and how exceptions are decided.
Exclude, and Say So Clearly
Excluding weight-loss use is a legitimate plan decision. It works best when employees hear it early, with a clear explanation and a pointer to the self-pay programs, including our guide to cash-price pharmacy options.
Carve It Out
Some employers route weight-management drugs through a specialty program that pairs the prescription with coaching and tighter monitoring. The fee and the results both need checking against your own claims. Compare any program on net cost, clinical support and how it reports outcomes, and ask for contract terms in writing. Review results regularly with your adviser so the program can be changed or ended if it does not perform.
We put your numbers next to the national ones before you decide.
This is part of our pharmacy benefit consulting and our wider health and cost strategy work.
Model Your Own Cost
Current GLP-1 spend from your claims, what coverage changes would do to it, and how persistence and price cuts change the picture over two or three years. Run the numbers under a few scenarios, including a conservative one, and share the assumptions with leadership. A range of outcomes is more useful for budgeting than a single estimate, and it shows where the biggest risks sit.
Read the Carrier and PBM Terms
What your carrier or pharmacy benefit manager actually allows on a fully insured plan, and on a self-funded plan what the contract says about rebates, formulary changes and specialty pricing. Pull the relevant contract sections and ask your adviser to explain them in plain language. Terms that look minor can decide whether an attractive offer is available to you, so confirm them before planning any change.
Plan the Change With Employees
Notice timing, what happens to people already on treatment, and how the change is explained so it lands as a decision, not a surprise. Give employees enough lead time to talk with their doctors, and decide in advance how exceptions and appeals will work. Clear, respectful communication matters as much as the rule itself, especially for people in the middle of treatment.
The questions that come up in every GLP-1 conversation.
Ten answers written for employers, not clinicians.
Do we have to cover GLP-1s for weight loss?
We are not aware of a federal or Michigan requirement to cover them for weight loss. Coverage for diabetes follows your plan’s drug list. On a fully insured plan, the carrier’s options may limit what you can choose. Other state rules are on our Michigan benefits compliance page.
We are fully insured. Can we decide ourselves?
Sometimes. It depends on what riders or pharmacy options your carrier offers at your size. In Michigan, the largest carrier removed weight-loss coverage for fully insured large groups from 2025, so the choice may already have been made for you.
What happens to employees already taking the drug if we stop covering it?
Give notice well ahead of the change, and consider a transition period. A material reduction in covered services must be communicated to participants, generally within 60 days of adoption under ERISA’s summary of material modifications rules.
Will the 2027 price cuts solve the cost problem?
They help, but list price is not what most plans pay after rebates, and a lower price can increase use. Model the net effect with your own pharmacy data before assuming savings.
Should we cover the pills instead of the injections?
That depends on your formulary, the clinical fit for each member and the net price your plan pays. The pills are new, and pricing is still settling.
Can we point employees to the manufacturers’ cash programs?
Yes. Many employers that exclude weight-loss coverage tell employees about the self-pay programs. Purchases outside the plan do not count toward the plan’s deductible or out-of-pocket maximum.
What about compounded semaglutide?
The shortages that allowed widespread compounding have ended. A plan should not build its strategy around compounded versions, and employees should talk to their doctor before using one.
How do we estimate what coverage would cost us?
Start from your current pharmacy claims, apply a realistic uptake and persistence assumption, and price it at your net cost. We build that model from aggregated plan data, not from anyone’s health information.
Does this affect a level-funded or self-funded renewal?
It raises expected claims, which feeds your claims fund and stop-loss pricing. Ask your carrier or stop-loss vendor how GLP-1 spend is priced in your renewal before the decision date. A second opinion on your renewal checks that pricing.
Can we require a wellness or lifestyle program?
Many employers do; about a third of those covering weight-loss use require one, according to KFF. Program design has its own rules under HIPAA and the ADA, so it belongs in the plan document and should be reviewed by counsel.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information about GLP-1 coverage, not legal advice. Plan-specific questions belong with ERISA counsel, and we will bring them in.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
ERISA (29 U.S.C. Chapter 18)
The federal law that sets reporting, disclosure and fiduciary rules for employer-sponsored benefit plans.
HIPAA Privacy Rule (45 CFR Part 164)
Federal privacy and security standards for protected health information held by health plans.
Americans with Disabilities Act (42 U.S.C. Chapter 126)
Prohibits disability discrimination in employment and other areas.
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