To cover or not to cover: HR’s GLP-1 dilemma

For HR leaders, one drug class being included in benefits and coverage plans is becoming harder to ignore  

As glucagon-like peptide-1 (GLP-1) medications emerge  as a treatment for obesity and diabetes — HR leaders face a pressing question: should these drugs be added to health plans — and, if so, how?   According to Aon’s 2027 Global Medical Trend Rates Report, GLP-1s are currently available as treatment in almost 70 per cent of countries surveyed and are covered by employer-sponsored medical plans in half of those markets. 

Aon defines the medical trend rate as the predicted annual percentage increase in the cost of treating patients and providing healthcare services The rate servers as tool to forecast the rising health care expense while taking in factors such as inflation prescription drug costs and advances in medical technology. 

 In countries such as China, Germany, Malaysia, and Mexico, coverage for these drugs is limited to the treatment and maintenance of diagnosed diabetes. However, In the United States, about 12 per cent of adults are using GLP-1 medications — with nearly two-thirds using them for weight loss as a primary or secondary goal. 

As the use and cost of these drugs rises, so will medical costs. GLP-1s and similar drugs can be attributed to anywhere from one to 10 per cent of the medical trend rate, the report finds. 

“What’s alarming is that this single drug class alone is driving that level of cost for employers,” says Joseph Koo, national pharmacist at Aon Canada. GLP-1s, he says, are a multi-indication drug — and the pool of people who qualify keeps growing. ““Diabetes, obesity, and now heart disease, fatty liver disease, kidney disease, and sleep apnea — every new indication widens the pool of eligible employees, he says. 

Ongoing Aon research is finding that employers who choose to cover GLP-1s tend to see lower medical trend rate increases over time — pointing to real value in supporting this drug class, Koo says. 

What medical data is showing overall about employees health plan  

The cost pressure of the drug also reflects the broader medical trend. While it might seem like health care markets are stabilizing, that does not mean costs are going down for employers and organizations. 

For the first time in five years, North America is seeing a lower medical trend rate — sitting at 9.2 per cent rather than the 9.3 per cent predicted the year before.  

However, that figure still represents more than three times the global inflation rate, according to the reportt. 

Globally, the average medical trend rate is projected at 9.0 per cent in 2027. 

Cardiovascular disease, cancer, and high blood pressure are the leading conditions driving healthcare costs globally — with obesity emerging as one of the fastest-rising risk factors the report finds. 

Obesity a major root cause 

Dr. Saifal Anwar, an internal medicine specialist and associate clinical professor at the University of Alberta in Edmonton, says the numbers back that up. 

“When I speak with family physician colleagues, they are seeing more and more patients presenting with these issues. The data backs this up. As of 2022, one in three Canadians is affected by obesity,” says Dr. Saifal Anwar, an internal medicine specialist and associate clinical professor at the University of Alberta in Edmonton. “The trend continues upward, and carrying excess weight leads to multiple other diseases.” 

Anwar says the complexity of the condition is what drives costs upward — and why it cannot be managed by willpower alone. 

“Obesity is a chronic, progressive, and complex disease,” he says. “There are multiple factors at play: hormones that regulate hunger and satiety, genetic predisposition, underlying health conditions, gut microbiota, environmental factors, and sleep. What we’re dealing with is a dysregulation of hormonal signaling, compounded by all of these additional variables.” 

The effects of obesity compound quickly. Anwar says it has been linked to more than 200 diseases — from stroke and heart failure, to diabetes, pancreatic and liver conditions, increased cancer risk, and osteoarthritis. 

“The cost of these medications is real,” he says. “But the cost of leaving the condition untreated is also real. There should not be a gap in access when medications are appropriately indicated.” 

What coverage gap means for employees 

Health Canada has approved GLP-1 medications — including semaglutide and tirzepatide — for both obesity and diabetes, Anwar says. However, private plans do not always keep up. 

“The criteria set by some private plans do not align with World Health Organization (WHO) or Obesity Canada indications for these medications,” he says. 

That gap, he says, creates a problem — leaving the root cause of so many conditions unaddressed. Anwar points to the SELECT trial — a large-scale cardiovascular outcomes study — which demonstrated roughly a 20- to 21- per- cent reduction in cardiovascular mortality with semaglutide. 

Koo notes obesity is not covered under public Canadian medical plans — even though the Canadian Medical Association recognizes it as a chronic condition. 

“That creates a real dilemma. GLP-1 coverage for obesity falls entirely in the private space,” he says. 

Questions about adding GLP-1 coverage 

However, before employers and HR leaders decide to add GLP-1s to a health plan, Koo says they should not be treated as a "single drug class" decision. 

“Employers need to decide how they want to support the health of their people — not just for diabetes, not just for obesity, but across all of these conditions,” he says. 

That means employers should be asking what the purpose of their plan is. Once that is figured out, the right access and cost control strategies can follow. Most carriers have placed GLP-1s under prior authorization, Koo says. However, that approach does not give employers financial control over the plan. 

“It determines eligibility based on clinical criteria, but once someone qualifies, it doesn’t control what the plan pays. It’s essentially a yes or no,” he says. 

What employers can do is look at the cost controls already inside their plans — starting with mandatory generic substitution. 

“Not voluntary substitution, mandatory — meaning the plan reimburses for the lower-cost alternative when one is available,” he says. “For GLP-1s used for diabetes, there are currently three generics on the market, with a fourth launching soon. A generic for weight loss has been approved but is not yet available — market intelligence suggests it will arrive in early 2027.” 

Coverage is only part of it 

While adding GLP-1s to a health plan matters, Koo says it is only part of the conversation. Employers also need to make sure coverage is paired with the right programs and measures. 

“Aon Canada’s consistent position is don’t build a benefit strategy around a single drug class. Look at the drug plan as a whole and make decisions grounded in strong governance,” he says. 

To manage health plan costs effectively, Koo says employers and HR leaders need to think about two things together — the financial risk and the human capital side. 

“There is a shared value concept here: the employer invests a certain dollar amount into the drug plan as an investment in employee health, but that value needs to be shared — with the employee, and in Canada, with public plans as well,” he says. 

On the human capital side, employers need to think about pairing coverage with the right communication strategy and targeted population health programs. 

“Those programs should measure outcomes: did a diabetic patient reduce their A1C after three months? Did someone managing obesity achieve a 10- to 15- per- cent weight reduction within six months of starting therapy?” he says. 

That also means acquiring mechanisms to check claims accuracy, understanding the level of financial risk, and knowing how to coordinate with public plans that cover diabetes for eligible patients. 

“When a single drug drives that level of expenditure, employers need to know they’re getting real value — not just from a reimbursement angle, but in terms of employee productivity, reduced incidental absence, and engagement,” Koo says. “Marrying financial risk management with human capital outcomes is the full conversation HR leaders need to be having.” 

New evidence, Koo says, is already pointing to manufacturers developing drug classes to address GLP-1 side effects — making the need for strong plan governance more important, not less. 

“This cycle will continue. The employers who build strong governance frameworks now will be better positioned when the next one arrives,” he says.