Half of workers may have trouble getting obesity drug coverage | Wilnesh News

Companies are increasing employee access to a new blockbuster weight-loss drug, but the size of the employer could have a big impact on early access. Small businesses and their employees are often faced with a dilemma when it comes to this booming health insurance market.

Small businesses employ about half of the workers in the U.S. labor market, and they are adding jobs faster than large employers. Small business hiring accounted for 53% of the 12.2 million net jobs created by all employers since the first quarter of 2021, according to the U.S. Bureau of Labor Statistics. long term trend.

The blockbuster weight-loss drugs, called GLP-1 agonists, cost an average of about $1,000 per month and usually require long-term use. There are increasing sources of access to these weight-loss drugs on the market, drugmakers are ramping up production, use cases are growing, and clinical trials are showing benefits for conditions ranging from sleep apnea to heart disease risk. But many of the 100 million obese American adults cannot afford to pay out of pocket for drugs like Novo Nordisk’s Wegovy and Eli Lilly and Company’s Zepbound, and are turning to their employers for help.

A survey of 205 companies last October by the International Foundation of Employee Benefit Plans found that 76% of respondents offered coverage for GLP-1 drugs to treat diabetes, while only 27% offered coverage for weight loss. But 13% of plan sponsors said they were considering covering weight loss. Covering these drugs, however, is more difficult for small employers, many of whom rely on off-the-shelf plans from insurance companies. While there are programs that cover GLP-1 drugs, their costs may be prohibitive for many small businesses.

Sean Greminger, president and CEO of the National Alliance of Healthcare Buyers Alliance, a buyer-led nonprofit, said employee demand for coverage is strong and small employers want to be able to do so, but need Weigh the pros and cons. Companies must consider the impact on wages or other benefits they may want to offer. “The money for the company has to come from somewhere,” he said.

In some cases, small employers who want to cover diet pills are simply priced out of the market even if they want to, and they may have to accept that they can’t provide the coverage they want.

“Given the price of these drugs, you have to do a cost-benefit analysis, and for a lot of small companies — and even some big companies — they just can’t do that,” Greminger said. “No matter how much they want it.”

Here are some things small business employers and employees need to know about getting expensive diet pills as part of their job benefits.

Annual benefit deals are currently underway. Open coverage season for health insurance doesn’t occur until the fall, but employers should have renewal discussions with their benefits brokers or agents now, and that discussion should include weight loss medications. Gary Kushner, chairman and president of Kushner & Company, said small business employers should tell brokers they want to be able to offer weight-loss drugs to employees and ask for help finding a suitable carrier or Proper planning.

The market changes quickly. Kate Moher, president of National Employee Health, said an insurance company may have said no when asked last year if it would cover weight-loss drugs, but it’s worth asking the company again because they may be forced to change their policy for competitive reasons. product. “You should ask this question every year,” she said.

Insurance premiums may increase. In order to obtain weight loss medications, many small businesses may have to switch insurance companies and potentially pay more. “If one doesn’t cover a drug and the other does, it’s likely to be more expensive,” Kushner said.

Employers must also decide how much of this can reasonably be passed on to employees without placing an undue burden on workers who may never need these medications. “If 20 percent of the population accepted this coverage, everyone’s premiums would go up to cover the cost,” Greminger said.

Small businesses should consider a “dedicated wellness” plan. In general, any business with at least 50 employees can consider captive health insurance plans, such as Roundstone, ParetoHealth, Stealth and Amwins, Moher said. These businesses allow groups of companies that cannot self-insure (the approach taken by most large companies) to pool resources and jointly design group health plans.

Moher said this approach could lead to more flexibility for small businesses and their employees, but owners would still have to weigh the costs and eligibility requirements. It’s also not something businesses can change every year like they can with traditional insurance companies. “It’s a long-term game; you can’t jump in and out,” Moher said.

These plans are designed for the long term because, as member owners, participants agree to spread risk, an approach that reduces costs and reduces volatility over time. But if business owners are looking for a quick fix or would rather wait and see how the market develops over the next year, this may not be the right model.

GLP-1 drug standalone coverage options are also available to some small businesses. Companies such as Vida Health, Calibrate, Found Health and Vitality Group provide these services independently of the employer’s primary carrier, Gremminger said. Employers need to do calculations to determine whether it is more cost-effective and whether the option is truly suitable for employees’ product-based needs.

Use an FSA to help pay for weight loss medications. If insurance coverage options are not an effective solution right now, small employers may have some other ways to help employees pay for weight loss medications. For example, they might consider contributing to employee flexible spending accounts or health savings accounts. They may also consider a health reimbursement arrangement (HRA), an employer-sponsored plan that reimburses employees for qualified medical expenses.

However, each option has strict rules and requirements. For example, with FSAs, the IRS limits employer contributions based on how much employees contribute, but that’s still not enough to cover the cost of these drugs over the long term. “Does it help? Of course. Does it solve the problem? No,” Kushner said.

This action cannot be taken without the approval of legal counsel. “You need the guidance of an ERISA attorney to make sure you meet all the standards,” Moher said. “It’s a creative approach, but you have to make sure all compliance requirements are met.”

For now, given the cost and limited options, the end result can be very frustrating for small businesses and their employees, but it’s also important to know that about 20 drugs are in the pipeline. Once approved, Moher said the cost will likely come down. “This is probably a short-term thing until we get more GLP-1 drug approvals.”