US employers increasingly dropping weight-loss drug coverage as healthcare costs rise nearly 10%

United States employers face a severe budgeting challenge as healthcare costs are projected to rise by over 9% in 2027, marking a multi-year inflationary trend. In response, approximately 14% of employers plan to drop coverage for expensive GLP-1 weight-loss drugs like Wegovy and Zepbound in 2027, down from 72% coverage in 2025. To manage these expenses, which are heavily driven by cancer treatments and specialty drugs, companies are shifting financial burdens to employees and making difficult tradeoffs with wage increases.

Employer healthcare cost increases

• ▪The projected 2027 healthcare cost increases represent the fourth consecutive year of near-double-digit growth, extending one of the most sustained periods of healthcare inflation in decades.
• ▪A study by professional services firm Aon projects average employer healthcare costs will rise 9.5% year-over-year to exceed $19,000 per employee in 2027.
• ▪United States employer healthcare costs are projected to increase by 9.2% in 2027 if companies do not implement cost-management changes, according to a survey by the Business Group on Health.

GLP-1 weight-loss drug coverage reductions

• ▪The share of United States employers covering GLP-1 weight-loss drugs decreased from 72% in 2025 to 60% in 2026.
• ▪Approximately 14% of United States employers have already dropped or plan to drop coverage for GLP-1 weight-loss drugs in 2027 due to rising healthcare costs.
• ▪Most companies offering GLP-1 drugs are not yet seeing them reduce the costs of treating obesity-associated conditions such as diabetes or sleep apnea, according to Brenna Shebel of the Business Group on Health.

Rising employee out-of-pocket expenses

• ▪United States employees are projected to pay an average of $5,297 for healthcare coverage in 2026, representing a 7.9% increase from 2025.
• ▪Employee out-of-pocket healthcare expenses are projected to rise 10.2% to $2,167 in 2026, while payroll contributions are expected to rise 6.4% to $3,130.

Drivers of healthcare spending growth

• ▪Pharmacy costs comprised 25% of employer healthcare spending in 2026 and are projected to increase by 12% in 2027.
• ▪Increased hospital costs, pharmacy costs, specialty medications, and policy changes have all contributed to rising employer healthcare spending.
• ▪Cancer was the most frequently cited condition driving healthcare spending, with 70% of firms naming it as their most acute cost driver in 2026, up from 58% in 2025.

Employer cost management strategies

• ▪Rising cost pressures have prompted employers to encourage the use of cheaper biosimilars, drop coverage for complex or specialty drugs, and explore alternative pharmacy arrangements.
• ▪A survey by the National Alliance of Healthcare Purchaser Coalitions found that 83% of employers state that rising healthcare costs will force tradeoffs with wage and salary increases.
• ▪Almost half of United States employers with 500 or more employees plan to shift 2027 plan offerings so that workers are responsible for a larger share of costs, according to a Mercer report.

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